Hong Kong, May 10: Crude prices continued to rally Thursday, propelling Asian energy firms and equity markets, as rising demand and Donald Trump's decision to tear up the Iran nuclear deal point to a thinning of supplies.

While broadly expected, the president's announcement has helped light a fire under oil, with both main contracts now sitting at highs not seen since the end of November and speculation they could go even higher.

The decision Tuesday comes as data shows US stockpiles are dwindling, major producer Venezuela is wracked by economic upheaval, and OPEC and Russia press on with an output cap.

“Unsurprisingly, crude continues to trade actively following the US pulling out of (the Iran pact) as the decision poses significant supply risk in the context of the delicately balanced supply and demand matrix,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

He added that “unless there are some production increases from the OPEC/Non-OPEC accord to offset the drop in Venezuelan production, and the expected decline of the Iranian output, prices could be in for a significant leg higher.

“Of course, there is little indication that the accord will be looking to intervene” but eyes are now on OPEC's meeting in Vienna on June 21.

Both main oil contracts, which rose around three percent on Wednesday, were almost one percent up in Asia.

The gains fed into energy firms with Woodside Petroleum surging 4.5 percent in Sydney, CNOOC three percent in Hong Kong and Tokyo-listed Inpex piling on 3.2 percent. (AFP/APP)