For the opening week of 2018, stock market pessimists must be feeling like bears with sore heads. As if the past 12 months was not sore enough for ultra-cautious defensive funds as markets soared worldwide, the bull momentum charges on.

Geopolitical risks have largely been shrugged off by the market, with the MSCI World Index up more than 13 per cent over the year, led by emerging markets and Japanese stocks.

A US economy recovering strongly, Asian markets on fire (congratulations to Baillie Gifford, whose Shin Nippon and Japan investment trusts are in the top 25 performers for 2017) and the IMF forecasting global growth for 2018 of 3.6 per cent, there’s good reason to remain fairly fully invested, even assuming market gains are unlikely to be repeated on the same scale and there is likely to be a pull-back or correction from recent record highs.

Volatile times are continuing for the sector. Andrew Milligan/PA Wire

In previous articles I noted the absence of market exuberance and euphoria – that this has been the most subdued bull run of recent times. Stock market advances have proceeded in the teeth of widespread investor scepticism about economic growth and political stability while  top-performing sectors such as information technology and digital giants appeared fully valued. But this cautious mood looks to be changing as the very advance of the market is itself the reason for chasing prices higher.

So this may be the occasion, not for fleeing equity markets altogether, but for reappraising those out-of-fashion “value” shares and sectors. At the same time, it is worth noting those sectors where the outlook has changed for the better but where there has been none of the excitement and razzmatazz that has driven the likes of Facebook, Amazon, Netflix and Google into the stratosphere.

Amid outstanding performances by trusts specialising in technology, media and telecoms, Asia Pacific markets and smaller companies in the UK and continental Europe, there is a notable omission.

Recent months have seen a rally in the commodities and natural resources sector, having fallen out of favour for most of the past three years. Brave were the investors who stuck with oil shares over this period. The oil price seemed doomed to a prolonged period below $45 a barrel. But the picture here has changed markedly. The spot price of Brent crude has risen 30 per cent from its low last summer to $58.59 a barrel while the price of Brent futures is up by 50 per cent to $67.69.

Will these gains be sustained? And where might the price go from here? So many and varied are the factors playing on the price of oil that attempts at prediction are, to put it mildly, brave. Much is written about the advance of the electric car and the swing away from fossil fuels. But we are now seeing the strongest period of oil demand growth since the global financial crisis nine years ago.

Saudi Arabia, the world’s key producer, is likely to maintain cutbacks in production to sustain the price improvement, for example. Iranian oil is back on the market, but US president Donald Trump may reimpose sanctions given his outspoken criticism of the regime’s recent clampdown on protests. Meanwhile every upward tick in the oil price is a boon to shale oil producers in the US. The Energy Information Administration already expects American domestic shale production to double this year from 2017.

While electric cars will advance,  petrol-driven vehicles will still be dominant for the foreseeable future. And exploration, innovation and technology improvement continue to drive the oil sector forward.

So there is a case for investors to drip a little oil into their portfolios this year. Already, and with little fanfare, shares in oil giant BP, down 4.6 per cent over the last 12 months, have rallied 19 per cent since the summer to stand at 529.6p where they yield 5.6 per cent.  Royal Dutch Shell B is up more than 25 per cent since the late summer to £25.63 where they yield 5.8 per cent.

For a broader spread of energy and natural resource stocks, investors may prefer BlackRock Commodities Income Trust. The shares had a miserable 2017, down by 4.6 per cent overall, but have risen 19.4 per cent over the latest six months. They are currently on a discount of 5.9 per cent and yield 5.1 per cent.

It will almost certainly be a volatile ride for the sector as those conflicting influences play out on the oil price. But while it should benefit from the continuing growth in economies worldwide, it offers a defensive dimension – that any rise in geopolitical tensions would be just as likely to push the oil price higher.

Bill Jamieson: Oil offers tempting but complex potential