0212 GMT May 25, 2018
Production cuts by OPEC and Russia over the past 16 months have helped crude prices rally, ft.com reported.
Brent crude touched its highest level since 2014 on Thursday, taking the international marker's year-to-date gain to almost eight percent. At the time the production curbs were approved, Brent was trading around $55 a barrel.
While prices have rallied and global inventories have fallen, OPEC is still seen as increasingly likely to maintain the cuts into 2019. Saudi Arabia — the group's largest producer — has given little indication it wants to reduce the cuts, even as prices hit new heights.
Brent crude rose as much as 1.3 percent to $74.72. At the time the production curbs were approved in January 2017, Brent was trading at about $55 a barrel.
"We are rapidly transitioning from a market drowning in oil to a new reality of undersupply and low storage levels," said Richard Robinson, manager of the Ashburton Global Energy Fund.
"At the same time, the market is facing heightened risk to current supply — as a result of the lack of spend and increasing political volatility in oil-producing nations — such as Venezuela and Angola. The seed is being sown for a structurally higher oil price, combined with heightened probability of risk premium," he added.
Fears about the impact on global growth of the US-China trade dispute eased as the two countries held back from a further escalation this week, while confirmation of high-level talks between Washington and North Korea also brightened the geopolitical backdrop.
In the US, the rebound for crude has brought investors back to resource stocks in April, after a moribund showing for the sector for the rest of 2018. The energy component of the S&P 500 was up nine percent over the month to date, outperforming a rise of about 2.6 percent for the wider S&P 600.
The trading pattern was also helped by a drop of 1.1 million barrels in US inventories, according to data released on Wednesday.
Oil-linked currencies also stood out, making notable gains over the month to date on global markets. The Australian and Canadian dollars gained by about two percent against their US equivalent. Norway's krone was up 0.6 percent over the same period against the euro.