Iranian issue remains fluid and it looks like more sanctions will be imposed by the world powers and they will likely raise tensions over Iran," said Victor Shum, a Singapore-based analyst at Purvin and Gertz.
Iran is the world's fourth-largest crude oil producer and traders fear supply disruptions from the Islamic republic if tensions between Tehran and the West heighten over its controversial nuclear programme.
Tensions over Iran's nuclear program helped push oil prices to record levels above 147 dollars per barrel last month.
Meanwhile, a new storm brewing in the Gulf of Mexico, where key US energy facilities are located, added to supply jitters, dealers said.
Daily chart shows that $120 is a good support level. Indicator is pointing up for oil.
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