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OPEC Image Credit: Reuters

New York: Oil extended gains amid signs of a recovery in demand in parts of the western world after OPEC+ provided an upbeat assessment of the market's outlook.

Futures in New York rose 0.8 per cent after closing at the highest since October 2018. Brent also climbed after settling above $70 a barrel. U.S. gasoline demand was the highest since the pandemic began last week, according to Descartes Labs.

That comes a day after Saudi Energy Minister Prince Abdulaziz bin Salman on Tuesday said consumption "has shown clear signs of improvement".

"The oil market welcomed the OPEC+ decision to stick with its existing production plan, and in conjunction with positive global demand indications, prices are gaining further today," said Louise Dickson, oil markets analyst at Rystad Energy. "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 rally in market structure is rippling all the way along the futures curve. U.S. crude for December 2022 was about $3.50 more expensive than futures for a year later, the strongest for that gauge since October 2018 on a rolling basis. Still, the pandemic is casting a shadow over the demand picture for the second half of this year.