June 9, 2022: -JPMorgan’s Marko Kolanovic indicates oil is increasing higher, but so is stock.

Kolanovic, the firm’s chief global markets strategist and co-head of international research, thinks the U.S. economy is strong to handle oil prices higher than $150 a barrel.

“There could be some potential more spikes in oil, especially given the situation in Europe and the war. So, we wouldn’t be surprised,” he told CNBC o Tuesday. “But it could be a short-lived spike and eventually, sort of, normalize.”

On Tuesday, WTI crude is trading around three-month highs, settling 0.77% to $119.41 a barrel. The bullish act comes as Shanghai reopened from a two-month Covid-19 lockdown, which needed the door for higher demand and upside. Brent crude closed at the $120.57 mark.

“We think the consumer can handle oil at $130, $135 we had that back in 2010 to 2014. Inflation-adjusted, that was the level. So, we think the consumer can handle that,” said Kolanovic, earning top honors from Institutional Investor for accurate forecasts for multiple years.

The base case is the U.S., and the global economy will avoid a recession.

But at a financial conference, the previous week, JPMorgan Chase Chairman and CEO Jamie Dimon told investors he was preparing for an economic “hurricane” that could be a “minor one or Superstorm Sandy.”

Kolanovic contends it’s important to be ready for all possibilities. “We do forecast a few slow down,” he said.

His company’s official S&P 500 year-end target is 4,900. But in the latest note, Kolanovic speculated the index would end the year around 4,800, still on par with all-time highs reached on Jan. 4. Currently, the S&P is 16% less than its record high.