Barclays raised its 2015 and 2016 average crude price forecasts on Tuesday, citing geopolitical tensions, unplanned production outages and lower natural gas prices in the United States.
The bank increased its Brent price forecast by $9 to $60 a barrel for 2015 and by $8 to $68 in 2016. It also raised its WTI price outlook by $8 to $54 a barrel this year and by $7 to $64 for 2016.
"The oil market is not out of the woods yet and weak fundamentals will weigh on prevailing bullish market sentiment in the second quarter," analysts at the bank said in a research note.
Bank of America Merrill Lynch and Societe Generale are the other two major banks that have made upward revisions to oil forecasts amid a rally in U.S. oil prices.
Geopolitical tensions, mainly in Yemen and Syria, unplanned production outages, including in the North Sea and Brazil, and lower U.S. natural gas prices were among the reasons Barclays listed for its revision.
Recent fighting between Yemen`s warring factions in southern and central parts of the country and air strikes from a Saudi-led coalition hit Houthi militia forces have created tensions over the security of Middle East oil supplies.
U.S. natural gas futures ended down more than 1 percent after falling on Monday to their lowest in nearly three years on forecasts for warmer weather and weaker demand over the next two weeks.
"Though some companies will have hedged for this possibility, the change in gas price means a higher oil price is needed to break even in certain gassier (shale) plays," the bank said.
However, the bank said that it sees downside risks to its price view should the Organization of the Petroleum Exporting Countries (OPEC) increase oil output.
