Following an OPEC-inspired dip to start the month, oil has now completely erased the decline and is threatening the May highs. WTI crude oil settled up $1.88 to $80.33 per barrel. That's the highest settlement since late April and just shy of the May intraday high of $80.62.
Last week there was a surprise build in US oil inventories but there is early talk that could reverse in a big way.
The curve is also sending some bullish signals with a stronger backwardation developing and front-month contracts trading 60-cents above the second month and that continuing out for a year. That highlights demand for near-term oil and undersupply in the market.
Other signs are less positive as broad cyclicals underperform and bonds rally. China data earlier today was mixed with retail sales beating estimates but industrial output falling short and house prices sagging more than anticipated.
Tomorrow's US retail sales report will offer another hint on the strength of the US consumer.
