The bank cut its 2019 Brent and U.S. West Texas Intermediate (WTI) price forecasts by $2 to $69 per barrel and $61 respectively. It also cut its 2020 view for Brent by $6 to $69 and by $5 to $62 a barrel for WTI.

Consumption growth is likely to slow to just over 1 million barrels per day year-on-year in 2019 as "growing protectionism amid an ongoing global industrial slowdown" weighs significantly on oil demand growth this year, the bank said in a note.

"However, we believe that the concerns of a glut are overdone and core petroleum inventory trends in the U.S. and globally remain supportive," analysts at the bank said, adding "the market is underestimating demand and overestimating supply growth at current price levels."

Oil prices steadied on Thursday after falling in the previous session when official data showed U.S. stockpiles of products like gasoline rose sharply last week, suggesting weak demand during the peak driving season.