"The world needs more oil than Opec seems willing to supply, making it difficult to avoid another surge in oil prices over the coming summer," the influential energy research group said in a monthly report.

"Far from being 'in balance' as Opec suggests, the oil market is experiencing a period of high price volatility that will persist as long as producers continue to seek prices above 60 dollars per barrel."

Last Friday crude futures reached an eight-month high above 70 dollars per barrel in London, as traders saw no end to concerns over tight supplies caused by unrest in key crude producer Nigeria and tight US supplies of gasoline or petrol, traders said.

In July and August last year, amid an already tight supply situation, prices had surged to all-time highs above 78 dollars per barrel on concerns about geopolitical instability in key producing regions -- particularly Iran.

The International Energy Agency (IEA) energy watchdog, meanwhile, had revealed last week that it plans to ask oil exporters' cartel Opec to increase output by the middle of the year to avoid a cut in stocks.