The recent talk by oil-producing nations about a possible output freeze is a positive sign even if it may not actually lead to an agreement, according to one analyst.
"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 US commodities research at Societe General, told CNBC's "Closing Bell."
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.
On the other hand, Wittner foresees that "perhaps a few months down the road, after Iran has finished ramping up ... they might be willing to have that conversation."
Still, market watchers remain wary that a supply freeze may well 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 sceptical, he said.
"We are already way below fundamentals," he said, adding that fundamentals suggest US$40 (S$56.30) oil.
Wittner forecasts that shale supply will "pick up momentum," driving the oil price to US$50 by the end of the year.
"In the second half of the year the global stock builds will be a lot smaller," he said. "The OECD stocks will be balanced."