In a well supplied market the front futures are down 12 cents at $106.71 after top-ticking at $107.45.
From MarketWatch:
U.S. oil hits 9-month high as Iraq worries simmer
The record levels reached by the stock market this week have been tainted by just how marginal the gains have been. The S&P 500 closed at all-time highs three times in a row this week, gaining just over 1% by Friday.
The weekly gains now resemble daily gains of yesteryear. In fact, the benchmark index has not had a daily move of more than 1% for more than two months. Still, the stock market is on track for solid monthly and quarterly gains barring a catalyst that may result in a long-awaited pullback.Several such catalysts, such as sectarian war erupting in Iraq and consequently a sharp rise in oil prices, continued tensions between Ukraine and Russia and the Federal Reserve policy meeting were brushed off by investors in equity markets in the past week.However, if oil prices continue to climb, stock markets will take notice, according to analysts at Morgan Stanley. Also read: U.S. oil hits 9-month high as Iraq worries simmerRising oil prices translate to rising gasoline prices, but there is lag of several weeks. Given recent jump in oil prices, gas prices in the U.S., which have remained stable since the beginning of May, are poised to increase in coming weeks. Higher prices at the pump will be taxing for consumers, whose purchasing power is still questionable.The good news is that a temporary price increase of $10 a barrel will have no impact on the economy a year out, according to Morgan Stanley analysts. That’s primarily due to increased efficiency of cars consumers’ change of behavior when gas prices rise – Americans just drive less.The not so good news is that a permanent rise of a $10 a barrel price increase would knock down real GDP growth by 0.4 percent four quarters out.“A sustained $50 a barrel jump in oil prices would be enough to stall the U.S. recovery,” the Morgan Stanley note said....MORE
