Oil prices continued their march higher on Thursday, after major global producers said they continued to hold down supply.
US West Texas Intermediate crude futures (CL=F) were trading at their highest since mid-January 2020, after breaching the $56 mark on Wednesday. Crude was up 0.7% to $56.06 (£41.22) at around 5.30am eastern time in the US (10.30am in London).
Meanwhile brent oil futures (BZ=F), the international benchmark, were trading at $58.82 (£35.95), up 0.6% and their highest since late February last year.
It came after the Organization of Petroleum Exporting Countries and their allies (OPEC+) announced “high compliance” among member states with agreements to limit supply to force up prices.
A committee of member countries’ representatives had held a virtual meeting on Wednesday, and gave no signals of a looming let-up in the cartel’s supply cuts.
A statement said countries had held down production by a total of 2.1 billion barrels since April 2020, when the market suffered an historic collapse and futures prices even briefly turned negative.
“The committee welcomed the positive performance of participating countries,” it said. “Participants pledged to achieve full conformity and make up for previous compensation short-falls, and stressed the importance of accelerating market rebalancing without delay.”
Oil prices had been making gains already earlier in the week amid a resurgence in confidence in wider financial markets.
“While economic prospects and oil demand would remain uncertain in the coming months, the gradual rollout of vaccines around the world is a positive factor for the rest of the year, boosting the global economy and oil demand,” added OPEC’s statement.
It comes as shares in London-listed energy giant Shell (RDSB.L) lost more than 1% on Thursday, despite the company raising its dividend.
The company posted an 87% decline in its adjusted fourth-quarter profits to $393m (£289m), lower than expected by analysts. It recorded a full-year loss of $21.7bn (£16bn) after lower oil prices forced it to follow rival BP in writing down the value of its assets.
WATCH: Shell acknowledges painful year after earnings miss