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Oil price surge and its impact on consumers

Oil futures keep surging higher — but consumers may be able to handle the recent spike in energy prices given their strong balance sheet, says one strategist.

"If a consumer balance sheet is in the best shape it's been in history — and the data does show that, what is the first thing they do? I don't think they will pull back on their spending. They're likely to tap some of their home equity or some savings," Michael Antonelli, market strategist at Baird, told Yahoo Finance Live on Monday.

"I think it's the first step to dealing with higher energy prices. I don't think it's a pull back on demand," he added.

Prices for both U.S West Texas Intermediate and Brent had reached an ominous level last week — about double compared to a year ago. Such a rapid price action has historically been followed by a recession. Three of the last energy shocks in the past 50 years preceded economic contractions.

The question is how long elevated prices will last.

"I think they [the consumer] will continue consuming. If this spirals ... if you get this parabolic move in energy prices then that's probably a much better indicator for demand kind of destruction," said Antonelli

On Sunday WTI futures touched $130 a barrel before retreating back down to $120 by Monday mid-session. Last week, U.S crude futures rose 26%, its biggest weekly gain since April.

Brent crude futures were trading at around $125/barrel on Monday afternoon, after surging as high as $137.

Ines is a markets reporter covering equities. Follow her on Twitter at @ines_ferre

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