"While we envisage spot Brent prices easing over the balance of the year toward $95/bbl as refinery maintenance season progresses and producers maneuver to offset supply losses, there remains a smaller but significant chance that prices move toward $180/bbl if supply disruptions increase," J.P. Morgan analysts led by Lawrence Eagles said in a note late on Feb. 25.

The bank increased its first-quarter Brent oil forecast to $108 a barrel, up from the previous $95. It also raised its first-quarter average forecast for US benchmark WTI crude prices by 3.2 percent to $96 a barrel.

Oil prices surged last week to hit 2-1/2 year highs after turmoil in Libya cut as much as three quarters of its 1.6 million barrels per day (bpd) output.

Markets cooled slightly after Saudi Arabia boosted its output and as the International Energy Agency said it was ready to release emergency stocks when necessary.

"With strong political and economic incentives to avoid a return to global recession, we see IEA's propensity to release as higher than normal, capping some of the upside price scenarios," the note said.