Oil prices extended their rally Wednesday on growing expectations for demand as the global economy recovers, while equities rose in Europe and edged higher in the United States.

Crude futures in New York closed at $68.83 a barrel, their highest level since October 2018, while futures in London climbed to their highest level since May 2019.

The rally comes a day after the so-called OPEC+ group confirmed its production plan amid optimism of increased consumption in a reopening global economy.

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.

But not everyone is sold yet on this bullish demand picture.

"The jury is still very much out on just how fast oil demand will recover," said a note from Louise Dickson, oil market analyst at Rystad Energy.

"The prevailing market expectation is that oil consumption will outpace supply by summer, but the demand euphoria is still receiving daily doses of reality as Covid-19 cases are boundlessly spreading in India and other parts of Asia.

The bump in oil has given a fillip to energy firms, though broader US stock markets have struggled to advance much.

Major US indices eked out gains, with energy equities the biggest winner, while health, industrial and materials sectors all pulled back.

Investors have been torn between optimism over the recovering economy and worries over higher inflation.

"We're in a bit of a holding pattern, where the major indices remain just below all-time highs but the momentum hasn't been there for a test of those levels," TD Ameritrade market strategist JJ Kinahan said in a trading note.

"It's understandable, really, when you consider the possible ramifications of the data coming up not just this week with jobs but next week with May consumer prices," he added.

In Europe, London, Paris and Frankfurt indices all rose, with the CAC 40 in Paris hitting its highest closing level this year.

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.

OPEC and other major producers have begun lifting output as the global economy emerges from last year's economic collapse and demand for oil improves
OPEC and other major producers have begun lifting output as the global economy emerges from last year's economic collapse and demand for oil improves AFP / JOE KLAMAR

New York - Dow: UP 0.1 percent at 34,600.38 (close)

New York - S&P 500: UP 0.1 percent at 4,208.12 (close)

New York - Nasdaq: UP 0.1 percent at 16,673.96 (close)

London - FTSE 100: UP 0.4 percent at 7,108.00 (close)

Frankfurt - DAX 30: UP 0.2 percent at 15,602.71 (close)

Paris - CAC 40: UP 0.5 percent at 6,521.52 (close)

EURO STOXX 50: UP 0.4 percent at 4,088.50 (close)

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)

Brent North Sea crude: UP 1.6 percent at $71.35 per barrel

West Texas Intermediate: UP 1.6 percent at $68.83 per barrel

Pound/dollar: UP at $1.4172 from $1.4150 at 2100 GMT

Euro/dollar: UP at $1.2216 from $1.2213

Euro/pound: DOWN at 86.16 pence from 86.31 pence

Dollar/yen: UP at 109.55 yen from 109.48 yen