DESPITE the recent blip - oversupply continues to weigh on crude markets. In recent weeks, oil prices went up by around 50 percent - from January's six-year low - posting their largest monthly gain in almost six years in April. Over the past one month, markets soared $15 a barrel - interestingly during a season when historically prices tend to be weak. Yet the buzz is a growing - this rally is unsustainable. A consensus seems emerging. The upswing indicates a deep disconnect with the physical markets - Reuters quoted traders as saying - as tens of millions of West African, Azeri and North Sea barrels appeared struggling to find buyers. On the other hand production refuses to go down - significantly - and- any time soon. Aided by record or near-record supplies from Iraq and Saudi Arabia, the April OPEC oil supply jumped to its highest in more than two years. Russian oil and gas condensate production is also at a post-Soviet record level of 10.71 million barrels per day (bpd) in April. And the return of Iranian crude, enough to dampen the market spirits further, could also be just round the corner. Iran is determined to regain its share of the crude oil export market when sanctions imposed over its nuclear program are lifted, Iranian Oil Minister Bijan Zanganeh said last week. Sanctions have cut Iran's oil exports by more than half to about 1.1 million bpd from a pre-2012 level of 2.5 million bpd. And though the US rig count continues to fall, week after week, for the last 21 weeks in a row now, touching the 905 mark on April 24 - from 1,854 during the same period last year - the US output doesn't seem going down - in the near future. There are indications that with the rise in prices, the demand boost from cheap oil would dissipate too, while the US shale industry will regain its momentum. According to David Hufton at London brokerage PVM, while some deep sea and Arctic oil exploration isn't feasible at the current prices, the shale oil industry can continue to grow at $60 a barrel as operation costs plummet. Shale industry thus remains optimistic! In its first-quarter results, oil company Devon Energy boosted its expected production increase to 25-35 percent – up from the previous quarter's forecast of a hike of 20-25 percent only. Noble Energy too made similar moves, and now expects to sell 300,000-315,000 barrels of oil equivalent per day, up from February's forecasts of 295,000-315,000 for 2015. “There's 5,000 wells in the US that have been drilled but uncompleted,” Matt Smith, global energy commodity analyst at Schneider Electric told CNBC's Squawk Box. “If those come back to market, as there is the financial incentive (currently) to do so, that could bring hundreds of thousands of barrels back to the market when we're still in a situation of imbalance.” There are plenty of headwinds for oil, a Bank of America Merrill Lynch report said. Refineries are going into maintenance in the fall which will decrease demand for oil. The strengthening US dollar will also pressure dollar-priced commodities like oil which become more expensive for holders of other currencies as the greenback appreciates. Many hence feel, oil markets are not out of woods - yet - despite the surge. “We don't think we're out of the woods yet when it comes to oil markets improving,” Barclays oil analyst Miswin Mahesh told Worldwide Exchange. “The rally from this year's low is impressive, but it contains the seeds of its own destruction in potentially re-stimulating supply and curtailing demand,” Hufton was quoted by WSJ as saying. Markets are simply awash with crude. “We'll see weakness come back into crude prices as basically we're still one and a half million barrels oversupplied on a global basis,” Matt Smith emphasized. “I think the downward pressure is going to build,” analyst John Kilduff told CNBC, underlining that all the elements that brought oil down to the low-$40s remain in place. For example, US production has not gone down “one iota,” he noted. “We're a million barrels over last year. If we get more Iranian barrels on the market from the easing of the sanctions, the perfect storm will re-emerge - particularly later in the summer when our refiners go into maintenance to gear up for the winter heating season,” he said. “You could see a real glut develop once again and it will get ugly.” An ANZ report highlights that the latest US data showing a rise in gasoline inventories was also stoking fears of weaker demand going into the northern hemisphere summer. Despite oil prices hitting a 2015 high, global demand remains soft and higher prices are transitory, a Bank of America Merrill Lynch report said. “I think as we move into the September-October contracts, we are going to see some downward pressure again,” said Francisco Blanch, the firm's head of commodities. Fundamentals “hardly,” justify a market rally, the Bank of America Merrill Lynch report added. “[The rally] conceals a weak underlying fundamental balance.” The bank sees US crude prices double dipping to $50 a barrel as refinery maintenance kicks in again in September before recovering to $57 a barrel by year-end. Bank of America has also raised its forecast for Brent, the global oil benchmark, to $63 a barrel at the end of the second quarter, but lowered its 3Q estimate to $54 a barrel. The main reason for the recent price rally is the increased demand for gasoline as consumers have taken advantage of low fuel prices. “US motorists have returned to the streets on a large scale, clocking an average 229 billion highway miles in January and February, up 3.9% year-on-year, while rediscovering their love for SUVs,” the report reads. Eugene Graner, of Bismarck-based Heartland Investor Services is quoted as saying that the current run up to $62 a barrel from the $40s was a seasonal rally and won't spike past $65. He was of the view that the rally may last several months, yet, ultimately the price of oil would sink into the $35 to $40 range in the fall. “A lot of people are looking for $70 a barrel, and they're not going to get it,” he was emphatic. Markets are not too optimistic. Signals being emitted indicate a bearish market - in the months to come. And it was apparently in this very perspective that Saudi Oil Minister Ali Al-Naimi, while talking to CNBC, underlined that “no one can set the price of oil – it's up to Allah”. He had a point. Markets are under no one's control. Those days are gone - and - forever!