JPMorgan said on Friday it sees upside price risks conducive to oil prices moving to $130 per barrel for 2013 from ongoing geopolitical issues, low spare capacity, the potential for stock building, and currency-related issues.
The bank sees Brent prices for 2013 average at $121.25 per barrel and forecasts 2013 average WTI price at $114.25 per barrel.
"Our analysis suggests that supply constraints will again be reached by the end of 2013, driving a quarterly rise in our ICE Brent price forecast to $130/bbl," it said.
JPMorgan maintained its price projection of $115 a barrel for Brent crude oil, and $97.50 a barrel for WTI through 2012.
Oil prices edged higher in volatile trading on Friday and posted a weekly gain as supportive US jobs data and a ratings downgrades of Spain and Italy buffeted markets.
Both Brent and US crude futures recovered late after retreating when Fitch cut Spain's credit ratings minutes after downgrading Italy, saying the intensification of the euro zone debt crisis has hurt the entire region.
"Some late price recovery came after the shock that Spain was included in the downgrades wore off," said Phil Flynn, analyst at PFGBest Research in Chicago.
"And there has been progress made with Europe moving to implement their version of quantitative easing," Flynn added.
Brent crude for November edged up 15 cents to settle at $105.88 a barrel, trading from $104.37 to $106.64.
Brent ended 3 percent higher on the week, the best percentage weekly gain since the week to July 8.
US November crude rose 39 cents to settle at $82.98 a barrel, having traded between $81.36 and $84.
US crude jumped 4.7 percent for the week, the best weekly percentage rise since the week to March 4.
US crude trading volumes were just 2 percent above the 30-day average while Brent volume was 9 percent under its 30-day average.