Oil prices have probably touched bottom and should recover in the second half of 2015 as the collapse in the market over the last year begins to curb production, a survey of analysts showed yesterday.

Oversupply is likely to keep a lid on oil over the next few months, and prices could retreat a little in the short term, the 34 economists and analysts contributing to this month's Reuters poll said.

But the market ought to see sustained rallies later this year, bringing North Sea Brent crude futures to an average of $59 a barrel in 2015 and to $71.80 in 2016.

Last month, the oil price poll showed its biggest month-on-month downward revision since the 2008 financial crisis, projecting Brent at $58.30 this year, its fifth successive monthly drop.

Brent crashed from a high above $115 a barrel last June to almost $45 last month and has since regained ground to trade at or slightly above $60 this week. Brent has averaged $53.72 so far this year.

Sentiment has stabilised over the last month, with evidence week by week that oil exploration and production are responding to the dramatic collapse in prices. Fewer drilling rigs in the US should eventually mean lower output.

"Oil prices have bottomed out and they will stabilise in the next few months before rising in the second half," said Italian bank Intesa Sanpaolo analyst Daniela Corsini.

Twenty-three of the 31 analysts who contributed to both the January and February polls retained their forecasts from last month, but eight increased their outlook.

Analysts agreed that a slowdown in non-Opec production, led by US shale producers, and unrest in the Middle East and North Africa, particularly Iraq, would support prices this year.

But several said a recent rally in prices had been overdone.

"The price surge since late January is exaggerated and will be reversed in the upcoming weeks as the oil market remains oversupplied," Commerzbank analyst Carsten Fritsch said.

The poll forecasts US light crude, or WTI, will average $54.50 a barrel this year and $66.90 in 2016. WTI has averaged $48.93 a barrel so far in 2015.

Brent's premium to US crude, known as the Brent-WTI spread, is expected to average $4.50 a barrel in 2015 from around $4.63 so far this year, the poll showed.

The survey shows output from the Organisation of the Petroleum Exporting Countries has fallen by 350,000 barrels per day (bpd) in February, below its target of 30 million bpd.

Opec at a meeting on November 27 agreed to retain that target for the first half of 2015 despite oversupply, a change of strategy aimed at defending market share rather than supporting prices.-Reuters