Brent crude futures are seen averaging at $115 by the end of June and $113 by the end of the year, according to a Reuters poll of 10 analysts. US light crude is seen at $105.5 and $105 at the end of each period respectively.

Oil prices saw one of the deepest drops ever last week with US crude plunging to $94 a barrel from $114 while Brent fell to below $110 from over $125, prompting some analysts to call an end of the commodities bull cycle.

“The recent sell-off in the oil market has created more short-term bearish technical signals, while the long-term bullish trend remains intact,” Standard Bank analyst James Zhang said.

“As the weak length in the market has been taken out, the market is building a foundation to attack new highs, barring any major economic upsets,” he added.

Slowing growth in emerging economies, oil demand destruction in developed nations, excessive risk premium linked to Middle

Eastern unrest and the end of a US bond buying program have all been cited as key reasons for last week’s slump.

Oil bears have also said the killing of Osama Bin Laden has helped reduce the risk premium, while the share offering of trading house Glencore also signals commodities have peaked. Europe’s sovereign debt crisis might also help elevate the dollar and depress commodities.

But many banks, including Goldman Sachs, which had rightly predicted a correction in oil, have said since last week that

tight global oil supplies combined with a likely prevailing dollar weakness on the back of low interest rates will most

likely help commodities recover.

Torbjoern Kjus, analyst at DNB NOR, said he now saw the political risk premium linked to the Middle Eastern unrest being

reduced to around $10 per barrel from $25-$25 before.

Frank Schallenberger from bank LBBW said he expected oil price to remain volatile in the next weeks.

“But the trend is still intact - especially the emerging markets will need more and more commodities. The trend therefore will be upwards again after this correction is over.”

A note of caution came on Tuesday when Bank of America Merrill Lynch said it disagreed with most peers and expected oil to fall below $100 by the end of the year if Libya starts producing oil again and the dollar unexpectedly soars.

“The potential drop in crude oil prices could be more pronounced if Libyan supplies happen to come back on line in H2 2011 and unexpected US fiscal tightening translates into a much stronger dollar,” it said, adding Brent will average $94 a barrel in Q4 2011.

But most analysts argued that oil would find support from Japan’s healthy oil demand as it rebuilds the country after a devastating quake while Chinese appetite should remain strong.

“I expect worldwide growth to be between 4.5 and 5.0 percent for 2011 and 2012. So demand for energy will stay very high,” said LBBW’s Schallenberger.