Goldman Sachs said it expects Brent crude prices to rise to $127.50 a barrel over the next 12 months in order to restrain demand growth and keep it in line with available supplies.

"We see the risks to our forecasts as skewed to the upside as world oil inventories have not been building despite Saudi Arabia pumping at its highest levels in 30 years and Libyan supplies returning to the market," analysts at the bank said in a February 22 note.

"This suggests that the increased supplies have been absorbed by the market and leaves the world in the unprecedented situation in which OPEC spare capacity is at a trough rather than at a peak just as the world economic recovery is getting on a more solid footing."