Oil prices rose slightly on Monday, continuing from a strong end to last week as financial traders increased bets on higher prices amid a slowdown in US drilling, but analysts warned fundamentals remained weak.

Front-month Brent crude futures were trading up 13 cents a $ 58 a barrel by 12:19 pm, while US crude had also risen 13 cents to $ 51.77.

Speculators in US crude futures and options raised net long positions by 52 million barrels in the week to April 7, their biggest weekly rise since 2011, data from the US Commodity Futures Trading Commission showed.

Reuters data shows open interest in WTI strike options for $ 60, $ 70, $ 80, $ 90 per barrel on Nymex has risen steadily since January, showing that many traders are betting on rising prices. Even volumes for $ 100 a barrel options have increased by almost 20 percent.

While many traders speculate that prices may not fall much further, analysts said a big price rally was also unlikely.

“Although there are tentative signs of demand improving and rig counts fell to the lowest level since 2010, an ongoing global market surplus – driven by swelling U.S. inventories and Saudi Arabian output to record high levels – should limit any potential rally,” ANZ said in a note.

Others were even more cautious, warning that fundamentals were deteriorating.

“Global oil fundamentals have been quite strong YTD (year-to-date), but we now see signs that physical markets are weakening. Global refining margins, while still healthy, have fallen materially. With U.S. runs set to ramp over the coming weeks, global turnarounds rising and product demand weakening seasonally, we expect product builds and pressure on global refining margins, which should diminish the appetite for non U.S. crudes,” Morgan Stanley said.

The bank said production from exporters like Libya, Saudi Arabia and Russia, as well as slowing demand for West African crude also indicated weak market fundamentals.

“All of these factors were a precursor to the price correction last summer,” Morgan Stanley said, referring to the halving of oil prices since June last year.

The bank said in a separate note that US oil production costs were falling, allowing a “lower cost structure” for oil prices.

Barclays said it expected “an expansion of oil market surplus in Q2 this year, with Brent expected to average $ 47/barrel and WTI expected to average $ 39 per barrel”.