Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) is starting to move higher after the recent pullback, and investors are wondering if this is the right time to buy.

Let’s take a look at the current situation to see if the stock should be one of your holdings.

Oil prices

The price of WTI oil has risen nearly 20% in August, and energy stocks are riding the move higher.

The turnaround is once again bringing new money back into the sector, but the volatility in the oil market remains a concern, and investors should be wary of the reasons behind the surge.

What’s going on?

WTI oil bottomed out in January at about US$26 per barrel. It then rallied above US$50 per barrel at the end of May on hopes of an agreement among international producers to restrict production.

As pundits began to realize that major players such as Saudi Arabia and Iran were not likely to come to an agreement, oil began to slide again.

By the end of July, it was back to US$40 and producers started to get nervous.

Fire up the rumour machine.

Suddenly, talks of a renewed effort to curb production started leaking into the media machine, and over the past two weeks oil has managed to claw back most of the losses since the beginning of June.

Here’s the catch

Saudi Arabia’s production could hit a record high in August, and other countries that are struggling with low prices also have the taps wide open.

OPEC members couldn’t agree on a supply freeze in April, and it’s unlikely the situation will change when the members meet at the end of September.

Even if major producers say they will hold output levels steady, few market watchers believe the countries will honour the commitment.

As such, oil might continue to move higher in the short term on rumours, but there is a risk the price will subsequently tank again in the coming months.

Crescent Point

Crescent Point reported Q2 2016 funds from operation of $404 million, which is down 23% from the same period last year. Lower energy prices are the culprit as revenue for the quarter came in at $42.45 per barrel of oil equivalent (boe)–roughly 25% below last year’s Q2 level.

The Q3 numbers should be better if oil can hold its recent recovery through the end of next month.

Management says it remains on track to achieve daily production of 165,000 boe/d in 2016, and full-year capital spending should come in near $950 million.

The company has done an excellent job of reducing costs through the downturn while maintaining output. That isn’t the case for many producers who are seeing production fall as a result of capex cuts.

Crescent Point is also taking advantage of the difficult times in the market to add new land positions in strategic locations. The company announced two new deals when it reported the second-quarter results.

Debt is at a manageable $4.2 billion, and the company finished Q2 with $1.4 billion in available credit.

As far as oil companies go, Crescent Point is in pretty good shape.

Should you buy?

If you are a long-term bull on the oil sector, Crescent Point deserves to be in your portfolio. The company owns some of the best properties in the patch and has the financial stability to ride out an extended slump.

However, investors should be careful about buying into the current rally. The market remains volatile, and there is a chance oil prices could reverse course again through the end of the year.

As such, I wouldn’t back up the truck just yet.

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Fool contributor Andrew Walker has no position in any stocks mentioned.