Encana Corp. (TSX:ECA)(NYSE:ECA) is giving back some of its big gains, and investors who missed the rally are wondering if this is an opportunity to buy the stock.

Let’s take a look at the current situation to see if Encana deserves to be in your portfolio.

Back from the dead?

Encana bottomed out last February near $4 per share. That’s a nasty slide from the $25 investors had to pay back in June 2014 and shows just how bad the oil rout has hammered the company’s valuation.

What happened?

Encana made two large acquisitions at the top of the oil market, as it began its transition from being a natural gas producer to an oil company.

Oil subsequently fell off a cliff, forcing Encana to slash its dividend, reduce capital expenditures, and sell off additional gas assets to lower the debt load. Management moved quickly, but once WTI oil dropped below US$30 per barrel in January of this year, investors figured the company wasn’t going to make it through the downturn.

Oil has since recovered to US$50 per barrel, and Encana’s stock has followed suit, topping $15 per share on renewed optimism for a sustained oil rally. Further debt reductions and the closing of a $1 billion share shale in September also helped push the stock higher.

However, oil has pulled back in recent days, and Encana is taking a hit as a result. At the time of writing, the price is back below $13 per share.

Will the oil rally continue?

Hopes that OPEC will follow through on its announced plans to implement production cuts have driven most of the oil optimism. The group, which produces 40% of the world’s oil, is scheduled to meet on November 30 to iron out the details of a deal, but major players continue to bicker about the terms.

For example, Iraq recently said it wants to be exempt from the agreement because it needs extra funds to fight its ongoing battles with rebel forces. The country is OPEC’s second-largest producer, so a deal without Iraq would have little bite.

Iran also wants to be exempt as it is still ramping up output after the lifting of sanctions.

That would leave Saudi Arabia to shoulder most of the burden for the group. Given the fact that Iran and the Saudis are backing opposites sides of wars in Yemen and Syria, it’s highly unlikely Saudi Arabia is going to restrict its output to boost prices and help out Iran.

As a result, investors should be careful about betting on higher oil prices in the near term.

Is Encana a buy today?

The company continues to make progress on its turnaround efforts, but the stock remains at the mercy of the oil market, as we have seen by the 15% drop in the share price since October 19.

Despite the recent sell-off, Encana has still tripled off the year-to-date lows, so I would be inclined to sit on the sidelines and wait for the pullback to run its course before buying the stock.

In fact, investors who picked up the shares earlier this year might want to lock in some profits.

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