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Oil bulls surrender and forecast low prices for the next five years

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One of the loudest remaining bulls in oil has thrown in the towel: Sanford Bernstein, the research firm, has dropped its five-year oil forecast to an average of $59 a barrel, down from $73. According to Bernstein analysts, oil will average $50 a barrel through next year, and not rise to $70 as they had previously expected, nor will it go up to the $80s through at least 2021.

Even as oil prices plunged over the last three years from more than $100 a barrel into the $20s and then hovered in the $40-to-$55 range, Bernstein had steadfastly retained its forecast of tight markets and revived high prices. Until now.

There is one reason: It's U.S. shale oil. Libya and Nigeria are seeing a big jump in production, too, which is contributing to the global oil surplus. But American shale, in particular the Permian Basin in Texas, is proving to be extraordinarily productive. The U.S. has astonishingly become a global oil exporting power, pushing out 1 million barrels of oil onto the global market.