In its Oil and gas macro outlook, Edison noted a narrowing supply surplus, signs of a weakening trend in US production and shale oil economics returning to viability - "stronger than expected" trends which led Edison to a forecast call for increases in Brent from $42.50 to $58.50 and for West Texas Intermediate from $49 to $53.
Edison left its Brent and WTI forecast for next year unchanged at $72.50 and $67.50 respectively, though it did see the potential for a firming trend in benchmark light crude prices in 2016.
The research house derived this from its view that the market would show further evidence of tightening driven by the lagged impact of capital spending cutbacks and a "modestly firming" demand backdrop.
As to how plausible was $20 oil, Edison said such a drop was "conceptually possible", but added "we think it unlikely in the near term".
Citigroup raised the possibility of WTI dropping in price to $20/bbl on a spot basis in coming months earlier this year, based on the potential for an extreme inventory build-up exhausting storage capacity.
"It's impossible to call a bottom point - which could, as a result of oversupply and the economics of storage, fall well below $40/bbl for WTI, perhaps as low as the $20 range for a while," Citi's global head of commodity research Ed Morse wrote in February.
Edison said that in the event of an "extreme inventory build-up exhausting storage capacity", WTI would have to rapidly drop in price to variable cost or less - which is around $20/bbl - to restore equilibrium and choke of supply.
"Such a situation would result in widespread well shut-ins in addition to a curtailment of drilling/completion activity," Edison said.
"Once equilibrium was restored the scene would then be set for a price rebound as the market place tightened, giving rise to a W-shaped price scenario from the second halves of 2014 and 2015.
"In the coming months US production is likely to trend down while demand moves significantly higher. The Cushing tank farm also retains significant spare capacity."
Edison sees two key issues for oil prices as far as the rest of 2015 goes.
The first relates to the speed with which production falls in the US rig count and the rate at which uncompleted wells are brought on-stream in the event of a "firming price trend".
"A more rapid than generally expected decline in production would, in all likelihood, provide a disproportionate boost to prices and vice versa," Edison said.
The wildcard in all this is Iran and the related UN sanctions regime, which Edison regards as the second of the key issues for oil prices in the coming months.
"A lifting of oil-related sanctions in the wake of a comprehensive agreement between Iran and the P5+1 group of world powers by the June 30 deadline could theoretically result in a significant dip in oil prices," Edison said.
