Bulls are backing oil price breakthrough

After a period of relative stability in oil prices, a slew of market participants are growing increasingly upbeat on a turnaround for the commodity, predicting a sustained rally in the near term.

The price of oil collapsed from near $120 a barrel in June last year to a low of around $45 a barrel in January. It has since bounced back to around the $60-a-barrel level. Analysts are now contemplating what the new equilibrium should be for the commodity, with a slew of market watchers predicting it could climb to around $70 before the end of the year.

"What we are seeing now is improvement, suggesting a recovery within the longer term downtrend…I'm short-term bullish on Brent," Roelof van den Akker, a chartist at ING Wholesale Banking, told CNBC Friday. He expects the price of Brent crude to reach $72.40 a barrel in the near future.

"I would not be surprised by further upside potential in Brent oil towards $78 to $80," he added.

And van den Akker is not alone. Michael Wittner, global head of oil research at Societe Generale, upgraded his own price targets for oil Friday morning, following sizeable gains in the previous session.

On Thursday, both Brent and WTI rallied to new 2015 highs on the back of tensions in the Middle East, a pickup in global demand and the expectation that the U.S. will continue to curb production.

On Friday morning, Brent crude for June delivery was up 70 cents at $65.55 a barrel by 10:00 a.m. London time. U.S. crude for June delivery was flat for the session at $57.75 a barrel.

Wittner now sees the "average" price of Brent being $58 a barrel in the second quarter of 2015, $60 in the third quarter and $65 in the fourth quarter.

"U.S. crude production has reached a plateau and is expected to decline soon in May," he said in the note.

Read MoreOil has bottomed, worst behind us now: Cheniere's Souki

"Based on this, we have higher conviction in a balanced second half. We also have evidence that the global rebalancing process, taking place on the back of U.S. shale oil, is finally getting underway. As a result, we are revising our price forecast upwards."

Hedge funds and other money managers are also among those eyeing a sustainable rally. Market data from the InterContinental Exchange (ICE) Monday showed that hedge fund bets on rising Brent crude oil prices last week hit record levels.

Speculators increased their net long positions for Brent futures and options to around 263,578 contracts in the week ending April 14 - meaning they were using financial products to bet on the price rising. This number was the highest level since records began in 2011, according to Reuters.

Read MoreThis is a critical time for crude: Technician

Many analysts, including the International Energy Agency, see high U.S production as a key factor behind the drop in the price of oil, along with weak global demand and a refusal to cut production by the Organization of the Petroleum Exporting Countries (OPEC).

However, a pickup in demand, and slipping production has seen oil rebound in recent weeks. Last Friday, oil services provider Baker Hughes reported that the number of U.S. oil drilling rigs in operation had fallen for a record 19th straight week and was now at its lowest since 2010.