When crude prices slowly deteriorated from $120 a barrel to near the $20s in almost 18 months, why should anybody be surprised if they went up few dollars in the last few days? But the more important question is whether this is a rebound or just another bump in the road of a roller-coaster market.

Like always, analysts are divided. There are those who believe that the rebound is real and there is only one way for prices and that is a recovery to some $50 a barrel. They say investors are “focused on declines in oil drilling and pinning their hopes on a freeze in output by major producers”, according to the New York Times.

In relative terms, the increase in the price of the Opec (Organisation of Petroleum Exporting Countries) Reference Basket (ORB) from $25.21 a barrel on February 10 to $35.22 a barrel on March 10 is undeniably significant, but has to be compared with a 21 per cent decline in January. The same trend is seen for other benchmarks and Brent tested more the $40 a barrel.

But the rise in prices wasn’t as smooth as some people like to think and there were many days of declining prices in the process, suggesting the market is still searching for direction and “that the recent market rally appears unsustainable”, according to the Wall Street Journal.

Fundamentally, nothing has changed to bring about this positive sentiment in the market. The growth in demand for this year is still lower that in the last and is 1.25 million barrels per day (bpd) according to Opec and 1.2 million bpd according to IEA. Non-Opec supplies are seen to decline by 0.7 million bpd by Opec and 0.6 million bpd by IEA.

World economic growth has been revised downward to 3.2 per cent as a result of lower forecasts in OECD, China and India, which may bring further revision on oil demand growth later.

Crude oil and products stocks are still at record highs whereas OECD commercial stocks stood at 3,012 million barrels at the end of 2015, higher by 350 million barrels over the last five-year average. Last year the surplus that went into stocks was 2 million bpd and more will do so this year albeit at a lower rate.

Opec crude oil production rose in January to 32.33- and 32.63 million bpd, according to Opec and IEA respectively, and about 1.7 million bpd higher than at the same time last year. All the fundamentals make us doubt whether the latest trend of oil prices is going to continue.

In its February “Oil Market Report”, the IEA in discussing the price appreciation in the second half of January said that this may be a “false dawn”. It said that pinning the hope on producers’ production cutbacks is speculation and that the likelihood of coordinated cuts is low.

I don’t know whether the IEA would modify its stance after the freeze agreed by Saudi Arabia and Russia and a few other Opec countries, but there is no way to say that the freeze, as good as it is, is going to change fundamental factors significantly.

There is no way that Iran will freeze its production and Iraq, with its binding contracts with oil companies likely to increase production though at a slower rate than last year. The fall in the production of high cost oil — such as tight oil in the US — is forthcoming but at a slow rate.

US oil production in December fell to 9.26 million bpd from a peak of 9.69 million bpd in April 2015. Stocks are likely to continue rising to the end of 2016 and this is weighing heavily on the market.

Ramzi Salman, the former deputy secretary-general of Opec, said in an article that “without removing the glut and putting a stop to price discounting in the producers’ fight for market share, there will be no solution.”

He pointed out that the high prices of the 1970s “made the development of the North Sea and Alaska”, which was “followed by a collapse in the mid-80s to prices in the single digits.”

The same is repeated when oil prices were allowed to approach $150 a barrel to “accelerate the development of costly unconventional oil and gas resources, including those from shale, oil sands and out of very deep waters.” The crash of 2014 came as a result.

The agreed freeze in oil production “irrespective of how many producers participate in the freeze, {will allow} natural production capacity decline {which} will be the most important factor in reducing the gap between supply and demand” but “strict adherence to the rules will be of utmost importance”.

For all the optimism around, let us hope that a real recovery comes.

The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.