Energy experts question oil's bottom

Insana: Oil headed to $20 a barrel
Insana: Oil headed to $20 a barrel   

It's been a wild ride for the markets this first week of January. As volatility in China's stock market weighs on investors, crude prices are threatening to tumble below $30.

The oil market doesn't have many bullish catalysts at the moment; there are fears of a declining demand in China, concerns regarding refinery maintenance and Iranian barrels are soon to hit the market, said Helima Croft, a senior strategist for RBC Capital Market.

"Do the fundamentals support oil in the $20s right now? Probably not," Croft said, speaking in an interview with CNBC's "Power Lunch" on Friday. She noted that macro-headlines could take the market anywhere.

Energy stocks weighed as WTI struggled to hold the $33 level. U.S. crude settled down 11 cents, at $33.16 a barrel, and the U.S. oil rig count showed a decline of 34 from last week, Baker Hughes said.

Still, oil's hit a short-term bottom, said Lawrence McDonald, Societe Generale's head of U.S. macro strategy. He argued that these are classic bear-market rallies.

"Bear market rallies can be amazing, you could get 20, 30, 40 percent rallies," McDonald said. "I think there's a high likelihood of another one."

In the same vein, Croft considers that barrels off the market may lead to a surge in the energy sector.

"I think we need to see something pretty major out of Saudi, out of Iran, to get people excited about oil," she suggested.

—CNBC's Evelyn Cheng contributed to this report.