After oil's high, a sharp fall may be in the cards

After a stellar month for beaten-down oil markets, the risk of another sharp slide downwards may be around the corner, analysts said Friday.

Brent crude and West Texas Intermediate (WTI) futures, the two global benchmarks for oil prices, rose almost 20 percent last month. Oil markets delivered their best monthly gains for six years thanks to weakness in the U.S. dollar and a view that the global supply glut would abate.

The bounce followed a rout in oil markets that started last June and saw prices halve in value from peaks above $100 a barrel.

"The reality is that this rally is probably premature. Fundamentally, the market is over supplied," Energy Aspects Geopolitical Analyst, Richard Mallinson, told CNBC. He added that crude stocks were building up at a fast pace because of a period of high refinery maintenance around the world.

"Also, OPEC producers led by Saudi Arabia are putting out well above their quota," he said, referring to the Organization of the Petroleum Exporting Countries (OPEC), which has an overall output target of 30 million barrels per day.

"I think we're in for quite a significant correction and actually, the higher prices go now, the further they'll have to correct before they can rally later in the year."

Brent crude oil prices were hovering around $66.50 a barrel on Friday, within sight of a 2015-peak of $66.93 set a day earlier.

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