Bank of America Merrill Lynch said it expected Brent crude to hit $140 a barrel in the next three months, before falling later in the year as high prices curb demand.
Brent crude has traded as high as $127.02 in 2011, the highest since 2008 when prices reached an all-time peak above $147.
Influential banks in commodities are expressing contrasting views on whether the rally will persist.
"The time is not yet ripe for oil demand destruction, and we maintain our view that Brent oil will average $122 a barrel this quarter, with prices temporarily breaking through $140 a barrel in the next three months," said the report dated April 19 by Bank of America Merrill Lynch analysts, including Francisco Blanch.
"However, with the first signs of demand destruction on the horizon and credit risks on the rise, we keep our view that Brent will average $94 a barrel in 4Q11."
Bank of America's view contrasts with that of Goldman Sachs, which on April 12 said it expected the market to experience a "substantial correction" towards its near-term target for Brent of $105 in the coming months.
Deutsche Bank also sees room for higher prices. On April 12, it raised its 2011 Brent forecast to $117.50 from $107.75.
Read more: Bank of America Sees UK Brent Oil Surging to $140