Crude oil has soared over the past week, crossing about the $105 level for the first time since March. And if this level doesn’t hold, that could be very bad news for oil bears and consumers alike, warns Stephen Schork, the editor of the widely followed Schork Report.
“At this point, the bears need to hold resistance right at this level,” Schork said on Tuesday’s “Futures Now.” “We’re looking at a triple top that was established first with the Ukrainian headline back in March. We came up, tested that area again back in April, and once again we are up at that area. If we fail, then there is not a lot of resistance between here and $112 a barrel, and that is the high we set last August on the geopolitical headlines related to Syria and Egypt.”
And if crude stays hot, that could have some dire ramifications.
“From a fundamental standpoint, when you net back $105 crude oil, we are looking at a hit to the consumer. For instance, over the last couple of weeks, we’ve seen a $3.50 run-up in price—that will translate to about an eight- or ten-cent rise at the pump for the consumer. AAA prices are right around $3.65 a gallon on a national average—we could be looking at, over the next couple of weeks, should oil stay at this level, at $3.75. And for the consumer, that is a lot of money.”