U.S. crude prices will likely drop to $40 a barrel in the near term, reversing recent gains in oil prices as global crude inventories begin to increase again, Goldman Sachs said. The price of crude had risen by a third this year due to supply disruptions from the Middle East and refinery slowdowns in the face of high margins.

The company said it expected crude prices to fall to levels last seen at the peak of the financial crisis in 2008. "While we continue to forecast a strong demand recovery in 2015, we believe that sequentially weaker activity, the end of winter and the end of potential restocking demand, will lead to a sequential deceleration in demand-growth as we enter the spring," Goldman Sachs said, Reuters reported.

The market has seen a significant increase in oil supply due to the growing use of hydraulic fracturing, or fracking, techniques used by shale oil producers in the U.S. However, the high cost of fracking meant that operating the rigs proved unprofitable as the price dropped, according to International Energy Agency figures cited by financial research firm Bidness Etc. This has led U.S. oil producers to abandon 90 rigs a week on average.

Goldman Sachs added that it expected demand from Asia’s Organization for Economic Cooperation and Development (OECD) nations to weaken as the region continued switching to liquefied natural gas (LNG), and also due to Japan’s plans to begin reactivating its nuclear reactors. The bank expects LNG to surpass iron ore as the world’s second-biggest commodity after oil, Oil And Gas Investor reported.

Goldman Sachs also said that the price of Brent would come under increased pressure. "As a result and absent further unexpected OPEC disruptions, we expect Brent oil prices and timespreads to reverse their recent strength, although the lack of a meaningful build in the past few months leaves risk to our forecast for [West Texas Intermediate (WTI)] oil prices remaining at $40/barrel for two quarters skewed to the upside,” it said in a note dated March 8.

However, the head of the Organization of Petroleum Exporting Countries (OPEC) said that prices would likely stabilize later this year, Bloomberg reported. Speaking at a Sunday conference in Bahrain, OPEC Secretary-General Abdalla el-Badri said that weak demand in 2014 had contributed to the falling prices, adding that usage was likely to rise by 1.2 million barrels a day in 2015.

He said that OPEC would not slash its production targets from 30 million barrels a day as doing so would effectively subsidize the higher-margin shale oil producers. “If we made a cut in the November meeting, then we would have needed to make another cut in January, and then we would need another cut in June as supply will keep increasing from non-OPEC,” he said at the conference.

Brent prices fell by 0.57% to $59.39 a barrel while WTI crude prices rose 0.38% to $49.80 a barrel as of 5:23 am EST, as the dollar hit an 11-year high over the weekend.