Slowing global seasonal oil demand and a potential release of emergency stockpiles by consuming nations will slow the oil price rally in coming months, before sanctions on Iran start affecting global supply, a Reuters poll showed on Thursday.

The monthly poll of 36 analysts showed an average increase in price forecasts for this year of $4 a barrel, on top of a $3 per barrel upward revision in February.

The revision reflects a 15 per cent rally in Brent prices  so far this year, amid growing tensions over Iran's nuclear programme. Analysts' revisions in March became the biggest in recent years, even exceeding changes in their views during the peak of the Libyan war in 2011.

The oil price rally prompted the world's top oil consumer, the US, to consider releasing strategic stockpiles to protect fragile economic recovery, while the world's top oil exporter Saudi Arabia said it stood ready to boost supplies to help cool global prices.

"We expect the oil price to come under pressure temporarily in the spring. This is based on the assumption that the crisis in Iran does not escalate further and that the feared supply disruptions do not therefore materialise," said Carsten Fritsch, senior commodities analyst at Commerzbank.

Oil commodity strategist Harry Tchilinguirian at BNP Paribas said:" Rising Opec production and year-on-year growth in non-Opec crude supply should place a cap on price through most of the third quarter - absent disruptions to traffic in the Straits of Hormuz or a military escalation with Iran".

Global oil demand weakens seasonally in the second quarter after the end of the northern hemisphere's winter heating season.

Commerzbank said an upward trend could resume later in the year should the U.S. economy show more signs of recovery or should Washington approve a new money printing programme.

Economic recovery

Analysts now expect Brent prices to average $114.30 per barrel for 2012, a $4 dollar increase from February's $110.3 forecast.

Brent prices rose to an 11-month high this month of $128.40 per barrel, just $20 dollars shy of their all-time high of $147.50 a barrel set in 2008.

Despite early signs of economic recovery in the United States, some analysts including Frank Schallenberger at LLBW said they expected global oil demand to grow only marginally this year.

"Supply is also still not very tight with Opec producing at a 3-1/2 year high. But on the other hand, the political tensions - Syria and especially Iran - are keeping prices up," Schallenberger said, adding he estimates the "political premium" in current oil prices at $20 to $25 per barrel.

A Reuters report showed this week that global supply outages were totalling at least 1.1 million bpd amid adverse weather, technical glitches and unrest in Syria, Yemen and Sudan.

Disruptions may grow as a European Union ban on Iranian crude takes effect on July 1 and Asian countries face pressure from Washington to cut purchases from Iran.

The International Energy Agency said in its March report Iran's oil exports could be curtailed by between 0.8 and 1.0 million bpd from the middle of this year.

Some analysts believe the supply loss could be smaller as Asian buyers will step in to buy volumes diverted from Europe.

"Sanctions against Iran will deter only relatively small volumes of crude (around 500,000 bpd), paving the way for a significant build in global crude stocks," said David Wech from JBC Energy.

"Later this year we will see potential for a considerable downward correction of crude prices as the physical market turns long," Wech added.

Opec leader Saudi Arabia is now pumping close to 10 million barrels per day, the highest in decades, and says it can quickly raise production to 12.5 million to fill any supply gap.

But analysts question whether its spare capacity cushion is actually that big and how the market would react even if Riyadh managed to quickly boost production.

"Operating with lower spare capacity makes the market vulnerable to unplanned supply outages," BNP Paribas' Tchilinguirian said. – Reuters