The next catalyst for a selloff in battered oil prices will come from stock level data that suggest supply in global oil markets remains high, analysts told CNBC.
"Inventories have been at a historic high so swollen tanks are likely to be the next spark for lower oil prices," Victor Shum, vice president of IHS Energy Insight, said on Monday.
Oil prices soared last week after data from the U.S. Energy Information Administration (EIA) said U.S. crude oil inventories fell by 2.1 million barrels in the week ended September 11.
The drawdown is often seen as bullish sign for oil markets, while news that U.S. drilling has slowed down lifted crude by more than 1.5 percent on Monday.
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But analysts remained bearish on the outlook for oil prices, which have halved in the past year, saying that inventories remained at high levels while a glut of supply would remain a concern.
And while latest data from the IEA showed a fall U.S. crude oil inventories – they remained almost 26 percent higher from year-ago levels.
"For U.S. shale production to swing lower we consistently need lower prices," Shum said. "Prices need to be below $45 a barrel in WTI for two quarters and -- with the bearish pressures we talked about such as inventories -- WTI could be below $40 in the last quarter of this year."
"There are reports that stock piles are at their highest levels ever, when you have supplies at their highest levels, 1.3 billion barrels, this is not the place where you expect oil prices to go up," Erin Gibbs, equity chief investment officer at S&P Capital IQ told CNBC on Friday.
"The lower dollar and Fed can help oil go up short term, but we just don't see the fundamentals and demand to see oil go up right now," she said.
Both Brent and WTI oil have shed about 50 percent of their value in the past year amid hefty supply in global oil markets, reluctance by major oil producers to cut production in the face of tumbling prices and concerns about demand especially as China's economy slows.
"We're negative on oil in the short term -- so over the next 12 months -- because of a supply glut," Patrick Armstrong, CIO, Plurimi Investment Managers to CNBC's "Squawk Box Europe" on Monday.
"There's no way the world gets rid of this supply glut in the next 12 months and long term oil moves higher," he added.