The International Energy Agency’s latest forecast for oil consumption growth is virtually unchanged from last month.
It also says that increased output from OPEC coupled with sluggish demand could pull down prices.
The agency said in its monthly report that there had potentially been a rise in global oil stocks of one million barrels per day over the last quarter, and the impact on prices had not yet been fully realised.
The IEA, an adviser to top industrialised nations on energy, highlighted factors including the possibility that countries, led by the US, could release stocks from strategic reserves, and Saudi Arabia’s pledge to pump more in response to tightening sanctions against Iran.
“Easing first quarter 2012 fundamentals have seen prices recently lose most of the $5 per barrel they gained in March. The muted impact so far is partly because much of this extra supply has been stockpiled on land or at sea,” said the IEA.
Brent crude futures rose to highs last seen in 2008 in early March – $128.40 a barrel – but have since given up those gains and traded at around $120 on Thursday.