Dubai: Brent crude recovered from its early intraday low before hitting its highest level since June 22, or the period before the Brexit, but analysts questioned the sustainability of prices at higher levels.

Brent crude was 0.04 per cent higher at $50.91 per barrel, after hitting a high of $51.22 per barrel, a level seen eight weeks ago. West Texas Intermediate was also 0.19 per cent higher at $48.31 per barrel, after hitting a high of $48.75, the highest since July 5.

“Opec has got what they asked for, and brought stability back to the market. Any further action from Opec is unlikely to be seen,” said Ole Hansen, head of commodity strategy at Saxo Bank.

In the past couple of weeks, oil has gained over 22 per cent. The major boost was provided when Saudi Arabia’s oil minister Khalid Al Falih last week said that the country plans to talk to other oil producers in late September to stabilise the market.

But analysts are not expecting much from the meeting in Algeria after a failure in Doha a few months ago, They expect a limited price upside from here, and even expect prices to fall.

“We don’t see prices moving much higher from here as traders are not moving on fundamentals. Global demand is not improving and hence we may trace back soon to $40 per barrel,” Naeem Aslam, chief market analyst with Think Forex said.

Even the rig counts from US shale have moved higher. They touched the highest level in six weeks, data showed last week, “The US shale producers are having a good time once again at these levels, and that would limit the further upside we have from here,” Hansen said, adding: “Bent crude would find a top at $50-52 per barrel, and we are going to see retracement as we move into September.”

Meaningful impact

On the local equity markets, which has a high co-relation with oil prices, analysts say that prices need to go much higher for any material impact on stock markets.

“The fact that oil prices have crossed $50 per barrel brings some confidence to investors but higher prices are required to have any meaningful impact on public budget deficit,” said Sebastien Henin, head of asset management at The National Investor.

The Dubai Financial Market general index has been on a gaining streak with a bullish undertone. The index closed 0.44 per cent higher at 3,572.44. The stock gauge is the top performer in the region so far with more than 12 per cent gains.