The bank also raised its estimate for U.S. crude by $10.70 to $65.63 a barrel. Merrill's forecast stands at $60.
To be sure, J. P. Morgan now thinks Brent crude, the international benchmark for oil prices, will average $70 this year, with demand-driven oil price strength in the first half offsetting weakness in the back part of the year as drillers pump more oil.
"This 2018 is going to be a year of two halves. The first half is going to be a ... half of demand, and the second half is more about supply, which is coming back in reaction to the higher oil prices," Abhishek Deshpande, head of oil research at J. P. Morgan, told CNBC's "Power Lunch" on Monday.
Stronger-than-anticipated business activity, economic growth and consumer spending convinced Deshpande that oil demand will be better than expected in the first half of 2018. Brent prices will rise toward $78 a barrel in the first or second quarter of the year, he forecast in a research note released late last week.