Oil prices rose on Thursday as the market digested unchanged demand forecasts and as traders tracked the latest political tensions surrounding key crude producer Iran.
New York's main contract, West Texas Intermediate crude for delivery in May jumped $1.24 to $103.94 a barrel.
Brent North Sea crude for May gained 57 cents to $120.75 in late London deals.
The International Energy Agency (IEA) maintained its forecast of moderate oil demand growth this year but said on Thursday that a tighter market trend since 2009 seems to be easing after a first-quarter rise in global stocks.
The IEA kept its 2012 forecast for growth in oil demand at 0.8 million barrels per day (mbd) to 89.9 mbd, with consumption falling slightly over the summer as is normal and then picking up again.
In its previous monthly report in March, the body representing the interests of oil consuming nations had warned of "a heady brew of both real and anticipated supply-side risks," chief among them concerns over Iran's nuclear programme, but this time it believed the pressures were easing.
Meanwhile, OPEC left its 2012 oil demand forecast unchanged on but cautioned that it now expects slower global economic growth, notably because of the eurozone debt crisis.
Current high prices were unjustified, driven by speculative activity on the markets rather than economic fundamentals, it said.
The Organization of Petroleum Exporting Countries put world demand this year at 88.64 mbd, up 0.86 mbd from 2011 and compared with 88.63 mbd in its previous monthly report.
"Various economic developments worldwide are almost offsetting each other, leaving the total oil consumption picture nearly unchanged from last month," oil producing cartel said.
It reiterated its charge that current high prices were due to speculation on the markets, combined with geopolitical concerns -- essentially tensions over Iran's nuclear programme -- and did not reflect actual demand.
Iran's President Mahmoud Ahmadinejad on Thursday said that his country "will not retreat an iota" from its nuclear rights, as Tehran prepared for weekend talks in Istanbul with world powers over its atomic activities.
"The Iranian nation is standing firm on its fundamental rights and under the harshest pressure will not retreat an iota from its undeniable right," Ahmadinejad said in a speech in the southern town of Minab, according to the official IRNA news agency.
The Islamic republic has vehemently denied Western assertions it is building a nuclear bomb and has threatened to shut the strategic Strait of Hormuz, a major passageway for a fifth of the world's oil supply, if it is hit with further sanctions.