Oil rose more than $2 per barrel on Tuesday, taking Brent crude futures to almost $113, after Goldman Sachs increased its forecasts for the North Sea benchmark, citing strong fuel demand growth.

The U.S. investment bank raised its year-end target for Brent to $120 per barrel from $105 and its 2012 forecast to $140 from $120, saying rising demand for fuel would draw global inventories and strain OPEC's spare oil output capacity.

July Brent rose $2.47 to a high of $112.57 per barrel, before slipping back a little to trade around $112.25 by 1324 GMT. U.S. light crude futures rose $2.12 to $99.82.

Goldman Sachs is one of the most influential institutions in the global oil spot market and its trading recommendations are closely followed by its many thousands of clients as well as other investors.

Other analysts were also bullish on the outlook for oil prices longer term, but some pointed to short-term pressures limiting significant further strength in the near term.

I see prices trading sideways for the next 2-3 months before jumping again in Q4, Simon Wardell, oil analyst at Global Insight, said. The forthcoming end of QE (quantitative easing) is taking some froth out of the commodity markets and there are some economic clouds around.

Stocks, bonds, gold and the euro are expected to fall in the three months after the end of the Fed's second massive bond buying operation, also known as quantitative easing, or QE2, a Reuters poll of 64 analysts and fund managers found last week.

GOLDMAN TARGETS

Goldman Sachs raised its 12-month price forecast for Brent to $130 a barrel from $107, and increased the end-2012 forecast to $140 a barrel from $120, citing global economic growth and tight OPEC spare capacity.

The bank, which in April had predicted the major correction in oil prices earlier this month, said on May 7 that oil could surpass its recent highs by 2012.

Echoing this view was Morgan Stanley, which raised its 2011 Brent forecast to $120 a barrel, from $100 previously, and lifted its 2012 target to $130, from $105.

The loss of around 1.5 million barrels per day of Libyan production, and firm demand from emerging economies, will lead to tighter inventories in the second half of the year, the bank's analysts said in a report.

It is very likely that OPEC will respond to tightening inventories by lifting their production; in response, we see flat prices moving higher as spare capacity continues its fall to untenable levels, the report said.

The Organization of the Petroleum Exporting Countries will meet in Vienna on June 8 to discuss output.

An expected fall in U.S. crude stocks figures for last week could also support prices, analysts said. A drop in imports and increased refinery use are forecast to have pushed crude oil inventories lower, according to a Reuters survey of analysts on Monday.

However despite the broadly supportive longer term outlook, technical indicators painted a bearish picture for the crude price, Phil Roberts chief European technical strategist at Barclays Capital said.

The (down) trend seems to have stalled but I think there's another test to the downside to come before we bounce higher, he said, adding that the $90-$95 level is key, with the 200 DMA, currently at around $90.50, a key area of support.

(Editing by Alison Birrane)

Goldman sachs