Oil prices are positioned to head higher in the second half, analysts said on Monday, after crude's dismal performance in the first six months of 2017 caught many commodity watchers flat-footed.
Crude oil prices fell about 14 percent this year through Friday's close, as an effort led by OPEC to drain huge global stockpiles disappointed the market. Some analysts see the potential for further declines, but a number of them told CNBC oil prices are more likely to rise than fall if they break out of a range.
Analysts said much of the recent trading has been based on technicals, or buying and selling based on crude's moves above and below certain price levels. Meanwhile, the physical market — which measures the actual number of barrels around the world — is moving back toward balance after a long period of oversupply that crushed prices, they said.
"We thought this market was actually a bit oversold. We think the fundamentals are better than where the price was earlier," Helima Croft, the global head of commodity strategy at RBC Capital Markets, told CNBC's "Squawk on the Street" on Monday.
U.S. crude prices plunged into bear market territory last month, tumbling to a 10-month low of $42 a barrel. The drop came after bets that oil prices would tick higher rose to record levels earlier this year.