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Rising Oil Is 'Beginning of Major Disaster' For Stocks

Oil rose above $82 a barrel on Wednesday on a recovery in demand in the U.S. before dipping slightly on Thursday. Meanwhile, the S&P reached its highest since October 2008 this week. Can the positive relationship between oil prices and the stock market continue? Rick Szpila of JPMorgan Futures and J.J. Burns of J.J. Burns & Company discussed their outlooks.

“If you take a look at the movement of crude oil and the S&P 500 index through most of 2009 and 2010, it has moved pretty much in the same direction,” Szpila told CNBC.

“As equity indexes have risen, the oil index has moved up…The price of oil has not been a hindrance to the equity markets.”

In the meantime, Burns warned that the oil and stock market relationship is the “beginning of some major disaster” that is likely to occur.

“We’re a consumer-driven economy and every penny that gas prices go up, takes $1.3 billion off the consumer’s balance sheets,” he said.

A year ago, the average price of gasoline at the pump was approximately $2.60 and the U.S. is currently "at around $3," noted Burns.

“The oil prices rising, gas prices rising, all bodes into a negative consumer sentiment. With $1.3 billion per penny rising in these prices, it’s difficult for the consumer—and bodes badly for stocks,” he said.

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No immediate information was available for Burns or Szpila.