NEW YORK (Reuters) - U.S. crude rose nearly 2 percent Monday, recovering slightly after moving within a hair of 11-year lows, but analysts and traders said it is still too early to declare the market has reached its bottom.

Both U.S. and global benchmark Brent crude have been tumbling downward since an OPEC meeting Dec. 4 at which the oil-producing countries removed their production ceiling, exacerbating global crude oversupply. Monday’s close marked the first significant rebound since the meeting.

Early in the day, both Brent and U.S. crude futures fell by as much as 4 percent to their lowest levels since the start of the 2008 financial crisis, before turning around midday in the United States.

Brent futures for January delivery LCOc1 settled down 1 cent at $37.92 a barrel. U.S. crude CLc1 rose 69 cents, or 1.94 percent, to $36.31.

The two benchmarks began to converge - a step toward eliminating the once-deep discount for U.S. crude - in an indication that the market is shifting structurally.

Early in the session, Brent traded just 13 cents above the $36.20 low set in December 2008. Below that level, it would be at its lowest since July 2004, when oil was rebounding from single-digits lows hit during the 1998 financial crisis and when talk of a commodities super-cycle was just beginning.

But the rebound from these near record lows may be short-lived.

“Crude cannot sustain any kind of significant rally until we see the fundamentals begin to shift,” said Matthew Perry, partner with Kronenberg Capital Advisors. Crude may fall further before the macro-economic changes needed for a recovery occur, he said.

“Rebounds off $35 overnight aren’t necessarily bullish or a structural change,” said Phil Thompson, vice president of market analytics at Mobius Risk Group in Houston. Because the market remains dominated by traders with short positions, the rebound does not necessarily indicate a macro-reversal, he said. “The market’s really sore. It’s very, very oversold.”

Data from the U.S. Commodity Futures Trading Commission (CFTC) on Friday showed money managers, including hedge funds and other big speculators, cut their net longs in U.S. crude oil futures by 12,117 contracts during the week to Dec. 8.

This marked a fifth straight week of declines that left their net long position in U.S. crude at 46,919 contracts, the lowest since the CFTC created the managed money category for oil in 2009. [CFTC/]

“The hedge fund community is extraordinarily short right now,” said Perry. “The fundamentals have not changed for crude oil. We are still expecting an overabundance of supply going into 2016.”

Crude markets that have been oversupplied due to the U.S. shale boom have seen supply woes compounded by OPEC’s latest decision and, more recently, by a Libyan ceasefire agreement Sunday that could bring shuttered crude from that country back online.

A fear of U.S. production increases also looms - while the latest data has shown that U.S. production is falling, shale production can respond quickly to price increases, so that any rally could be met with a production increase.

As a result of this relatively fast price-response, the recovery may be extended, Perry said. “Right now, world economies are soft. It’s going to take awhile.”

Markets are now turning their attention to the dollar’s performance and supply data from the Energy Information Administration expected Wednesday, said Thompson. “If there’s a draw, I think you’d expect to see a stronger short-covering rally,” he said. “Especially if you saw a drop out of Cushing.”