Oil price may cause investor pain this time

By Jeremy Gaunt, European Investment Correspondent

LONDON (Reuters) - Oil's spike to all-time highs around $87 a barrel has set long-term investors wondering whether the price of crude is finally getting high enough to do economic damage.

At issue is whether the current jump in prices will spur inflation and, most crucial of all, start hitting consumers in their up-until-now resilient pockets.

"It is ... becoming a risk now," said Lex Hoogduin, chief economist at Dutch investor Robeco.

Oil prices have climbed 43 percent this year, high enough to give pause at the very least.

On an inflation-adjusted basis, they are not far from the roughly $90 a barrel record seen during 1980, the year after the Iranian revolution and during the Iran-Iraq war, although that was an average for a whole year and not a spike.

So the question for markets, to paraphrase David Shairp of JPMorgan Asset Management, is whether the price hurdle at which pain is felt has been reached.

One gauge of this will be whether the price stays up.

A good portion of the current spike is tied to the threat of Turkey attacking Kurds in northern Iraq and could easily come off if tensions ease.