U.S. crude oil rallies more than 2% to top $80 per barrel, adding to last week’s gains

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Crude oil futures rose Monday following their best week since April as traders sifted through mixed economic data out of China.

U.S. crude oil and global benchmark Brent closed out last week nearly 4% higher, as analysts expect the market to tighten in the third quarter as summer fuel demand draws down inventories.

Oil stockpiles should fall by 850,000 barrels per day in the third quarter, said Helima Croft, head of global commodity strategy at RBC Capital Markets.

“It’s more of a sense that this market is likely to get tighter as we go deeper in summer,” Croft told CNBC’s “Closing Bell: Overtime” on Friday.

Here are today’s energy prices:

  • West Texas Intermediate July contract: $78.83 per barrel, up 38 cents, or 0.48%. Year to date, U.S. oil has gained 10%.
  • Brent August contract: $83.02 per barrel, up 38 cents, or 0.46%. Year to date, the global benchmark is ahead 7.7%.
  • RBOB Gasoline July contract: $2.42 per gallon, up 0.87%. Year to date, gasoline is up 15%.
  • Natural Gas July contract: $2.82 per thousand cubic feet, down 1.91%. Year to date, gas has gained 12.3%

“After three weeks of losses the oil complex finally made amends and gained some traction,” said Tamas Varga, analyst at oil broker PVM. “The move higher was not unreservedly convincing, nonetheless developments over the past five trading sessions did not indicate any souring of investors’ sentiment either.”

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WTI vs. Brent.

Traders were making sense Monday of what the latest economic data out of China may mean for demand. Retail sales in the world’s second-largest economy beat expectations, but industrial output and fixed asset investment disappointed.

Uncertainty over China’s economy and growth in oil demand has long hung over the market. OPEC expects the Chinese economy to grow 4.8% this year, with the country acting as the primary driver of crude consumption in the developing world.

The Paris-based International Energy Agency, however, revised its global oil demand outlook lower on softness in China. Demand growth in China slowed from 800,000 barrels per day in the first quarter to 95,000 barrels per day in April, according to the IEA. Global oil demand growth will come in at 960,000 barrels per day this year, about 100,000 barrels per day lower than previously forecast as a consequence, according to the agency.

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