Yes, crude oil prices hit $130.00 U.S. a barrel this morning. But, unlike other market commentators, it is not the price of crude that concerns me; it is the stock market reaction to it, as the market tells us what higher oil prices will mean for the economy months from now.

As I have written before, up until $125.00 a barrel, the stock market had very little concern for higher oil prices. The Dow Jones Transports, an index comprised of the largest shipping companies in the world, dependent on oil, has been a stellar performer since January. But at $125.00 oil a barrel, the Transports index starts to fall apart.

Oil futures are now at twice the price they were a year ago. Remember that call I made almost two years ago where I predicted $100.00-a-barrel oil in the face of vast criticism from other analysts and even my own readers, because no one at that time could fathom oil at $100.00 a barrel -- turns out I was too conservative!

Now, you have major market players coming out and predicting even higher oil prices. Goldman Sachs expects crude oil to reach $200.00 a barrel in two years. Oil man T. Boone Pickens sees $150.00 a barrel this year. When I read and hear about these kinds of predictions about the price of oil, I again start to take a contrarian view. I don't want to run with the crowd. And right now that crowd is saying that oil is headed for between $150.00 and $200.00 a barrel.

Can the U.S. economy take oil at the low end of the forecast, $150.00 a barrel? Definitely not; that's what the stock market is telling us. As a market veteran of 26 years, my opinion is that the higher price of oil is the single biggest deterrent to the stock market right now. If oil prices maintained below $120.00 a barrel, we would be witnessing a much stronger stock market.

What's causing oil prices to rise so rapidly?

Everything I am reading this morning in the newspaper and the Internet is about how strong demand in China, especially for diesel, is spurring prices higher. I have a different view, though.

As I wrote a couple of weeks ago, oil producers are getting pathetically richer on high oil prices. The major American oil companies collectively made more than $50.0 billion in profits in the first quarter of this year -- that's over half a billion in profits a day! What other industry makes that kind of money today?

But I believe that Abdullah al-Badri, OPEC's Secretary General, said it best the other day when he told a Reuters reporter that the weak U.S. dollar could keep pushing oil prices higher. Let's face it; the U.S. dollar has lost 40% of its value against a basket of major world currencies in less than five years. Would oil still be trading at $130.00 a barrel if the U.S. dollar didn't lose any of its value over the past five years? Of course not!

Tomorrow, I'll tell you exactly why the stock market is worried about the high price of oil and what I believe the big surprise for investors could be.