The sharp rise in crude prices during mid-August has given the global oil and gas sector hope for long-term upwards momentum, but it may be too early to start taking about a recovery.

Brent crude closed at $50.88 a barrel on Friday 19 August, rising above $50 for the first time since the first week of July, after Opec member countries agree to meet next month to potentially discuss production caps.

The price has also been boosted by speculators taking record short positions, and the relative decline of the US dollar.

Crude prices had hit a low of below $42 a barrel at the start of August on continued global oversupply and the resumption of production in countries such as Nigeria and Canada after outages.

Opec members will meet on the sidelines of an energy conference in Algeria on 26-28 September, the 14-member oil-exporters group announced without specifying what will be discussed.

“The verbal intervention in the oil market which initially came from weaker Opec members got a strong boost when Saudi Arabia’s energy minister joined in,” says Elo Hansen, head of commodity research at Denmark’s Saxo Bank.

“While weaker members desperately need higher prices, Saudi Arabia’s agenda was more likely to try and stabilise the market after having oil reverted to a bear market in the weeks following the Brexit vote,” he added.

Riyadh’s decision to back an Opec meeting coincided with the release of figures showing that Saudi crude production is likely to hit an all-time record high of 10.9 million barrels a day (b/d) in August.

Although Opec’s announcement has reversed the bear market, analysts on whole believe it is unlikely that the organisation will reach an agreement to freeze crude production in late September.

Meanwhile, figures from Baker Hughes show that the number of drilling rigs in the US increased for the eight straight week, indicating a recovery in the American oil sector.

The US Energy Information Administration (EIA) recently upgraded its 2016 forecast for US oil production to 8.73 million b/d from a previous prediction of 8.61 million b/d.

While the Opec statement has created positive sentiment, it is unclear whether supply-demand balance in the global crude market will shift to allow for prices to recover further in 2016.