By Barani Krishnan
NEW YORK (Reuters) - Oil prices dipped on Friday after an early rise to 2016 peaks, and were on track to rise 20 percent for April, the largest monthly gain in a year.
A weaker dollar and optimism that a global oil glut will ease have boosted crude futures about $20 a barrel or more since they plumbed 12-year lows below $30 in the first quarter.
With prices less than $5 away from $50 a barrel, investment bank Jefferies said the market "is coming into better balance" and would flip into undersupply in the second half of the year.
But others warned that the rally was driven by investors holding large speculative positions, while oil stockpiles were still high, with a Reuters survey showing OPEC output in April rising to its most in recent history.
"The issue is that we haven't seen price rallies ... correlate with fundamentals," said Hamza Khan, senior commodity strategist at ING. "The fundamentals - high stocks, high production - haven't changed."
Technical analysts said crude could cruise to $50 a barrel but stiffer resistance before $55 could spark profit-taking on the market's biggest rebound in two years.
Brent crude was down 25 cents at $47.89 a barrel by 12:07 p.m. EDT, after setting a 2016 high of $48.50.
U.S. crude slipped by 20 cents at $45.83, after a year-to-date peak at $46.78.
Analysts polled by Reuters raised their average forecast for Brent in 2016 to $42.30 per barrel, the second consecutive month of increases.
Bank of America Merrill Lynch said in a note that "non-OPEC oil supply is indeed hanging off a cliff", and estimated that global output would contract year on year in April or May for the first time since 2013.
The OPEC survey aside, Saudi oil output was expected to edge up by 350,000 barrels to around 10.5 million barrels per day, sources told Reuters, as tankers filled with unsold oil floated at sea seeking buyers.
The discount in spot U.S. crude to the next trading month meanwhile whittled to its smallest since January, reducing the advantages of storing oil in the United States for later delivery.
(Additional reporting by Libby George and Karolin Schaps in LONDON and Henning Gloystein in SINGAPORE; Editing by Dale Hudson, Elaine Hardcastle and David Gregorio)