Oil to go to $50 by the end of the year

"The Saudis and Russia — and even indirectly Iran— they're talking to each other, so you now have the beginning of a process," Mike Wittner, head of U.S. commodities research at Societe General.

Russia and OPEC countries talked about an oil production freeze this week, but Iran did not commit to following suit. Iran's oil minister did say, however, that the country is supportive of initiatives that will stabilize crude prices. Oil Minister Bijan Zanganeh's comments came after Iran said it planned to increase oil production by 500,000 barrels per day. The rise in output is a result of sanctions on Iran being lifted earlier this year.

Still, market watchers remain wary that a supply freeze may will budge the crude glut.

Wittner argues, however, that oil prices have been driven not by fundamentals but by external reasons, namely China and emerging markets. Also, In the event that oil producers cap production, the uncertainty may drive investors with a short position to be skeptical, he said.

"We are already way below fundamentals," he said, adding that fundamentals suggest $40 oil.