This price of oil approached the five-year low hit early this month, and the market got little support from mixed Chinese trade data.
(READ MORE: Oil hits five-year low)
"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015," Morgan Stanley said in a report dated 5 December.
Brent crude for January delivery dropped to a low of 67.73 US dollars a barrel, near last week's trough of 67.53 US dollars, which was its weakest since October 2009. It was down 85 cents at 68.22 US dollars at 0504 GMT.
The price lost 6 cents initially after the release of Chinese monthly trade data that was well below expectations, with November exports rising only 4.7 per cent from a year before and imports falling 6.7 per cent.
Following the release an hour later of data showing that its crude oil imports rose 9 per cent in November from October to 6.18 million barrels per day (bpd), the price edged up 8 cents, only to drift back down again.
(READ MORE: Oil falls $3 to 4-year low after OPEC leaves output unchanged)
In its report, Morgan Stanley slashed its 2015 base-case forecast for Brent to 70 US dollars from 98 US dollars and for 2016 to 88 US dollars from 102 US dollars. In its worst-case scenario, the bank says the crude benchmark could fall as low as 43 US dollars in the second quarter of next year.
At a meeting last month, top oil exporter Saudi Arabia resisted calls from poorer members of the Organisation of the Petroleum Exporting Countries to reduce production, fuelling a further slide in prices, which have lost more than 40 per cent since June.
Saudi Arabia has since cut the prices of the crude it sells to the United States and Asia, which analysts said shows it is stepping up its battle for market share.
(READ MORE: Are future oil supply projects at risk?)
"With OPEC on the sidelines, oil prices face their greatest threat since 2009, but we expect a volatile 2015 rather than a one-way trade," Morgan Stanley said in a report.
US crude fell 72 cents to 65.12 US dollars a barrel, after hitting a session low of 64.63 US dollars. West Texas Intermediate crude touched 63.72 US dollars last week, its lowest since July 2009.