$70 oil menaces budding recovery

As oil prices rise, some say already weak consumer spending is in danger of taking an even harder hit.

NEW YORK (CNNMoney.com) — Two weeks change a lot in the oil markets.

At the end of May CNNMoney.com ran a story asking if $60 oil will kill any economic recovery. ‘No,” most analysts said – consumers could shoulder $60 crude, and analysts didn’t see prices going much higher.

Now oil is touching $70 a barrel. Goldman Sachs recently said it sees crude at $85 by the year’s end. With the economy still on life support, oil is drifting dangerously close to being the wet blanket at the recovery’s party.

Many say consumer spending – which accounts for over two thirds of the nation’s economic activity – takes a big hit when crude hits $100 and gas $3 a gallon. Some say it’s more like $125 crude and $4 gas. Others say that during a recession $80 is the breaking point.

But putting a number on it is almost beside the point. The higher it goes, the more it hurts.

CNN