Prices fell in early trade on Friday, hitting a session low of less than $125 a barrel after the announcement of an investigation by U.S. regulator the Commodity Futures Trading Commission (CFTC) made traders cautious, but many players are still bullish.

"Our view is that this bull run is not over," said Mike Wittner of SG. "It’s going to continue to be volatile ... there’s further upside."

He said the bank was forecasting lower U.S. demand, but expected Asian oil consumption to continue growing.

While high prices have triggered protests in many countries, Asian demand has been kept robust in part because of fuel subsidies.

The have cost governments millions, prompting Taiwan, Indonesia and Sri Lanka to raise domestic fuel prices and India is considering it.

Yet South Korea said on Friday it might cut taxes on fuel to ease price pressures as transportation workers threaten to strike, and Thailand said it was selling fuel at a discount to bus companies after a one-day strike.

(Additional reporting by Margaret Orgill, Luke Pachymuthu and Santosh Menon, editing by Barbara Lewis)