08:51 AM EDT, 04/12/2024 (MT Newswires) -- Oil prices rose early on Friday, supported by fears of a widening Middle East war as Iran is said to be readying a retaliatory attack on Israel even as the International Energy Agency lowered its demand forecast for this year.

West Texas Intermediate crude oil for May delivery was last seen up US$1.39 to US$86.41 per barrel, while June Brent crude, the global benchmark, was up US$1.19 to US$90.93.

The rise comes on worries Iran is ready to retaliate against an Israeli attack on its Syrian embassy this month that killed senior members of the country's military with missile or drone attacks on targets in Israel, raising fears of a wider Middle East war that would threaten oil supply from the Persian Gulf region. CBS News reported early on Friday the United States issued a warning for travel to Israel, fearing an attack on the country is near.

"Crude trades higher an will likely remain bid into the weekend amid fears of an Iran attack on Israel," Saxo Bank noted.

The International Energy Agency released its influential monthly Oil Market Report on Friday, lowering its forecast for 2024 demand growth to 1.2-million barrels per day from its March estimate of 1.3-million bpd. It also expects demand growth to slow further in 2025 to 1.1-million bpd as it sees peak demand approaching on a falling call on supplies from China and the rise of clean-energy technologies.

"While we expect growth in oil consumption in 2024 (1.2 mb/d) and 2025 (1.1 mb/d) to remain robust by historical standards, structural factors will lead to a gradual easing of oil demand growth over the rest of this decade. Continued rapid gains in the market share of EVs, particularly in China; steady improvements in vehicle fuel economies; and, notably, efforts by Middle Eastern economies, especially Saudi Arabia, to reduce the quantity of oil used in power generation are together expected to generate an overall peak in demand by the turn of the decade," the agency said.