"It's the most even-handed battle we've had in about three months. This time the bears have a chance, in my interpretation," Dietz said. "Oil is up now on the [Norway] fire and the dollar's decline but the bears are hanging in there on the likely production increase from Saudi Arabia. Right now, this is a tug of war and nothing has been resolved." Dietz added that he is currently flat, or has no open energy trading positions.

Saudi Arabia, the world's largest oil exporter, is expected to increase oil production next month by 500,000 barrels per day, according to analysts and traders who have been briefed by Saudi officials, The New York Times reported Saturday. Dietz said if the production increase is confirmed in the days / weeks ahead, oil is likely to head lower.

"An increase of 500,000 barrels is not much in terms of global daily production but it sends a signal that the Saudis will accelerate production increases and that they now believe the markets are not well supplied at current levels," Dietz said. "That will take a lot of the short-term longs out of the oil market."

Further, Dietz added that unknowns regarding specific Saudi oil operations -- the kingdom does not publish oil production or investment statistics -- will also create more fear among oil bulls, in his interpretation. Dietz said it's generally believed that Saudi Arabia has about 3-5 million barrels of spare capacity, but can only reach the top of that increased production total in about three years.

"If the Saudis in fact have the ability to increase production faster, that would change this market in a hurry, no question," Dietz said. "What the oil bulls fear is a production increase of 500,000 barrels, followed by the announcement of another production increase of 500,000 barrels later this year. That would cause some hedge funds to exit this market quickly. It's something that the bulls have to be concerned about."

Last week, Saudi Arabia summoned oil producers and consumers to a June 22 summit in Jeddah to address the cause(s) of oil's relentless price rise.

Saudi Arabian Oil Minister Ali al-Naimi said the summit will find a solution to "stabilize" oil prices he argues are "unjustified" by supply / demand fundamentals, Bloomberg News reported Friday. The price of oil has risen more than 100% in in the past year and is up more than 400% since 2000.