THE oil price will remain under pressure for years amid booming production in US shale fields according to an analysis which has sobering implications for the North Sea supply chain, although decommissioning work is set to increase.

The forecast from Bank of America Merrill Lynch could pour cold water on hopes that life is going to get easier in the North Sea where the industry is emerging from the deep downturn triggered by the crude price plunge from 2014.

Read more: Recruitment 'firmly back on agenda' in North Sea as confidence rises

The partial recovery in the crude price which followed supply cuts by major exporters from late 2016 helped persuade firms to start investing in North Sea projects again.

However, Brent crude has fallen around 20 per cent after reaching a four year high of $85 per barrel in October, as surging US output and concerns about global growth weighed on prices.

It sold for around $66.40/bbl yesterday.

Experts at Bank of America Merrill Lynch appear to see no prospect of the price recovering even to the level reached in October for years.

Read more: One in three North Sea oil jobs 'lost' since 2015

If they are right the days of $100/bbl plus oil which stoked the boom in North Sea activity that ended in 2014 are likely to remain a distant memory.

“We project Brent prices to average $50 to $70/bbl, now out to 2024,” wrote analysts at Bank of America Merrill Lynch.They added: “In contrast to last year, we see growing downside risks to our price outlook on rising US shale supply and slowing consumption growth.”

The report findings will be regarded with caution in the North Sea.

Oil and gas firms have shown renewed willingness to invest in the area after three lean years during which they slashed investment in response to the oil price fall. Some 13 UK North Sea projects won approval last year, more than were sanctioned in total in the three preceding years.

However, supply chain conditions remain tough.

Firms that operate fields have been trying to cut the cost of developing and running assets to help them compete. The UK North Sea has been seen as a high cost area.

Read more: Wood shares plunge as engineering giant highlights fresh crude price challenge

In December engineering giant Wood said the crude price fall since October could dampen any recovery.In August Wood’s chief executive Robin Watson said the firm had seen an encouraging if modest increase in North Sea activity after three years of decline.

Meanwhile Aberdeen metals group John Lawrie and Forth Ports have signalled their confidence in the outlook for North Sea decommissioning activity by announcing plans to invest £5 million in a facility in Dundee.

Aberdeen-based John Lawrie group said it would use the facility to dismantle redundant infrastructure that is brought ashore during oil and gas decommissioning projects and for metal processing work. Up to ten jobs are expected to be created when the facility is launched in 2020..

Managing director Dave Weston said the investment underlined John Lawrie’s commitment to support the oil and gas decommissioning sector under its long-term growth strategy.

The company will lease the two-acre site from Forth Ports, which is developing a decommissioning hub at Dundee. Forth Ports hopes Dundee will win a notable share of the £15.3billion that industry body Oil & Gas UK forecast in November will be spent on decommissioning UK infrastructure over the next decade. The estimate was £4bn lower than one prepared in 2017. The fall reflected improvements in productivity gained as the industry matured along with activity being pushed back beyond 2027.

The Oil and Gas Authority regulator has said North Sea decommissioning costs could total £58bn. The taxpayer could face a multi-billion bill for the related reliefs.

The Wood Mackenzie consultancy predicted in December that the recovery in the North Sea would be consolidated this year.