Cowen and Co. adjusted its oil price forecasts for 2015 and 2016 on Dec. 8, citing “the combination of continued weakness in global oil prices and our sense of what oil company budgets look like when they are released later this month and in January” as reasons for the two-year correction.

The research firm pegged WTI at $70 per barrel (bbl) and Brent at $75/bbl for 2015. For 2016, WTI was pegged at $75/bbl, and Brent was pegged at $80/bbl, the firm said. “An upcycle can begin” again in 2017 when “supply and demand will be back in sync,” the firm added.

In the immediate term, domestic rig activity is poised to fall “sharply.” In the months after 2014’s “fourth quarter peak,” rig activity should fall by 400 to 500, based on first-half 2014’s WTI prices, which hovered between $65/bbl and $70/bbl. If the year finishes out on these prices, Cowen said, “We could go well below 1,300 rigs in the second half of 2015.” Because prices improved “modestly” in this year’s second half, Cowen forecasts that in 2015 rigs would decline to 1,400, for a total count of 1,515. This estimate is 18% lower than Cowen’s forecast of 1,855 in 2014.

Overall, exploration and production capex should drop about 25% in North America in 2015. Elsewhere, the drop will be a “more restrained” 8%. The countries expected to perform well are Angola, Argentina and Saudi Arabia, while those expected to decline are North Africa, Norway and Russia. In 2016, international capex will drop 6% further.

The predicted declines will affect profits at “a significant majority of the [service] companies” that Cowen analysts cover.

In the report, analyst James Crandell rated Baker Hughes Inc. (NYSE: BHI) at Market Perform, with a new $2.50 price target for 2015 and a new $2.10 price target for 2016. Originally, the company’s targets were $4.65 and $6.90, respectively. He rated Halliburton Co. (NYSE: HAL) as Market Perform, with a new $3.35 price target for 2015 and a new $2.75 price target for 2016. Originally, the company’s price targets were $4.15 and $5, respectively.

This should all come to pass “unless something unexpectedly positive happens with oil prices” in the near term, the firm noted.