At the same time, bullish inventory data is seen as supportive for near term oil prospects, with this week's crude supplies falling by 10.3 million barrels (2.6%), to 383.8 million barrels. These declines come as the result of temporary pipeline closures in Canada, and strong demand from BP's re-opened refinery in Indiana. Gasoline supplies were also lower (reversing analyst expectations for an increase). Viewed in conjunction, these figures in oil and gas inventories suggest that demand in rising in the U.S., and this another bullish element to consider when assigning market valuations. The S&P 500 is trading back toward the middle of its monthly range, but additional upside looks unlikely as long as external uncertainty and elevated oil prices limit prospects for further runs higher. The key area to watch going forward will be gas prices, which so far have not rallied as much as oil and have the potential to negatively influence consumer spending. If a sluggish economy ultimately translates to weakening global demand, supply levels remain adequate, and concerns in the Middle East begin to subside, the rally in oil will fade as well. But with prices still well below last year's resistance highs (at $110 per barrel), there is scope for additional upside in crude. Until we see a meaningful turnaround in prices, stocks will have difficulty gaining additional momentum. This makes it more likely we will see a spike back below 1600 in the S&P 500 before we see another test of the all-time highs. At the time of publication the author held no positions in any of the stocks mentioned.This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.