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The current downturn in the global oil industry may prove to be more severe than in 1986, when business endured the deepest slump in 45 years, as OPEC keeps markets oversupplied, according to Morgan Stanley.

Increased production from the Organization of Petroleum Exporting Countries is more than compensating for slowing growth in U.S. shale oil, the bank said in a report dated Tuesday. OPEC has boosted output by 1.5 million barrels a day since February, an amount roughly equal to a year’s increase in world demand, it said. Still, Morgan Stanley expects the industry to recover before the crisis reaches the extent of the 1980s.

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“The entire current oversupply can be attributed to OPEC supply growth over the past four months,” analysts including Martijn Rats and Haythem Rashed said in the report. “On current trajectory, this downturn could be worse than 1986.”

Oil producers have cut $130 billion US in investment and 70,000 workers in response to lower prices, Morgan Stanley estimates. Crude has tumbled as OPEC maintains elevated output to pressure rival producers including shale drillers in North America. Brent crude futures traded near $56 a barrel in London on Wednesday, down 47 per cent from a year ago.