Oil prices will rebound this year and U.S. stocks still have room for gains after tripling since the financial crisis, according to investment strategists at Goldman Sachs Group Inc. who cater to the bank’s wealthy individual clients.

Oil has tumbled more than 50 percent to $48.25 since June as increased production in the U.S. and slower growth overseas reduced demand and created a glut in supply. U.S. producers have cut back as a result while Middle Eastern suppliers haven’t, Brett Nelson, head of tactical asset allocation in Goldman Sachs Private Wealth Management’s Investment Strategy Group, said today.

“U.S. producers have started to respond, and quite aggressively,” Nelson said. “This in combination with general stabilization in growth in the broader global context will allow oil prices to settle into a $60 to $80 range in the second half of the year.”

Nelson gave the firm’s 2015 outlook at the bank’s New York headquarters along with the unit’s chief investment officer, Sharmin Mossavar-Rahmani. Private wealth accounted for about a third of Goldman Sachs’s $1.15 trillion in assets as of Sept. 30. The strategists’ optimism came a day after Bill Gross, the former manager of the world’s largest bond fund, said prices for many assets will decline this year as record-low interest rates fail to restore sufficient economic growth.

Increase Stocks

Goldman Sachs is advising clients to overweight U.S. stocks to about 63 percent of their equity allocation, compared with 52 percent if they went solely by market capitalization, said Mossavar-Rahmani. The market hasn’t fully priced in U.S. preeminence in economic growth, reduced manufacturing costs and increased labor productivity, she said.

“What has struck us this year is the gap between the U.S. and other parts of the world has actually widened,” she said. “It has been striking.”

The strategists predict U.S. equities will return 4 percent this year after rallying 14 percent in 2014. There is a 1-in-4 chance that stocks will gain more than 20 percent, based on historical performance and the current valuation range, the strategists wrote in a report.

A rebound in oil prices to at least $60 would also be positive for high-yield bonds. It would produce a default rate of 6 percent, below the 8.5 percent the market is currently pricing in, the strategists said.

Investors should expect about a 5 percent return on average from hedge funds on a pre-tax basis this year, similar to last year’s prediction, she said. The industry on average gained 1.4 percent in 2014, according to data compiled by Bloomberg.