- On Tuesday, OPEC+ agreed to continue lifting output in July, having started slowly doing so in early May.
LONDON: Oil prices extended their rally Wednesday on growing expectations for demand as the global economy recovers, though equity investors trod more cautiously amid lingering inflation fears.
While some countries are struggling in their battle with the coronavirus, the general mood among dealers is upbeat with the global economy rebounding sufficiently strongly as vaccines are rolled out and parts of the planet slowly return to a semblance of normality.
And one of the biggest beneficiaries of that is the crude market, with demand for the commodity picking up as people begin travelling again and factories restart.
Both main contracts have rocketed from the dark days of April last year -- when they crashed in reaction to the imposition of lockdowns around the world -- helped by top producers slashing output.
But with the world recovery now on track, the 23 nations of the so-called OPEC+ oil producers' group are confident that demand will increase enough for them to open the taps further.
On Tuesday, OPEC+ agreed to continue lifting output in July, having started slowly doing so in early May.
"The demand picture has shown clear signs of improvement," said Saudi Energy Minister Prince Abdulaziz bin Salman.
Russian Deputy Prime Minister Alexander Novak said: "We see that demand has increased, that prices have stabilised," and spoke of a "normalisation" of the global economy.
That came after the International Energy Agency said the second half of the year could see a gap between demand and supplies, which could push prices even higher.
However, the group gave little away about plans for August and its views on the possibility of Iranian oil coming back to the market if Tehran seals a nuclear deal with world powers that will lift sanctions on the country.
WTI on Tuesday rose to $68.87 -- its highest level since October 2018 -- while Brent peaked at $71.34, before they pared gains.
They continued to climb Wednesday and observers suggest they could break even higher.
The bump in oil has given a fillip to energy firms, though broader markets in Asia struggled to build on recent gains.
Tokyo, Sydney, Seoul, Taipei and Jakarta all rose, with Manila surging more than three percent on reports the government plans to ease some containment measures.
However, Hong Kong, Shanghai, Singapore, Mumbai, Bangkok and Wellington dipped.
But in Europe, London, Paris and Frankfurt edged upwards.
The mixed performance followed a tepid lead from Wall Street, with analysts saying a slow rebound in US employment take-up dampened spirits.
Investors will be keeping a close eye on the release of May jobs creation data this week, having been massively disappointed by April's reading.
Key figures around 1045 GMT -
Brent North Sea crude: UP 0.9 percent at $70.90 per barrel
West Texas Intermediate: UP 0.8 percent at $68.23 per barrel
London - FTSE 100: UP 0.1 percent at 7,088.32 points
Frankfurt - DAX 30: UP 0.2 percent at 15,596.74
Paris - CAC 40: UP 0.3 percent at 6,508.01
EURO STOXX 50: UP 0.1 percent at 4,075.62
Tokyo - Nikkei 225: UP 0.5 percent at 28,946.14 (close)
Hong Kong - Hang Seng Index: DOWN 0.6 percent at 29,297.62 (close)
Shanghai - Composite: DOWN 0.8 percent at 3,597.14 (close)
New York - Dow: UP 0.1 percent at 34,575.31 (close)
Pound/dollar: DOWN at $1.4135 from $1.4150 at 2100 GMT
Euro/dollar: DOWN at $1.2184 from $1.2213
Euro/pound: UP at 86.20 pence from 86.31 pence
Dollar/yen: UP at 109.85 yen from 109.48 yen