By Kate Gibson

As crude oil on Friday hit a high for the year above $74 a barrel, energy shares rallied, fueling the broader U.S. stock market toward weekly gains. But if oil's price gains continue, what has been viewed as a bullish signal could easily turn bearish for U.S. equity investors.

Positive U.S. and European economic data, along with weakness in the dollar, helped in supporting oil's surge, with the front-month futures contract lately up $1.13 at $74.04 a barrel, after earlier hitting $74.72 -- its highest level so far this year. .

Crude futures have had "trouble staying above $73" and hence had been trading in a range of $65 to $73 a barrel, said Kevin Kruszenski, director of equity trading, KeyBanc Capital Markets Inc.

"So today it's a focus, since we're at a very important level," he said.

While crude's climb on Friday had it rallying to its highest point yet for the year, a barrel of oil remains roughly half of where it stood at its height last summer, when crude-oil futures on July 11 hit an intraday high of $146.65, with the Dow industrials shed 129 points that day.

"A year or so ago, higher (oil) prices were bad for the stock market, now the inverse is true. It's seen as a sign of economic recovery," Kruszenski noted.

Rising energy costs would be seen in a less favorable light should the price of crude climb back over $100 a barrel, Kruszenski said. That said, it's unlikely that that would happen anytime soon, he added.

"It's too early in the economic recovery. I don't think there is enough business or consumer activity," said Kruszenski.

Other analysts had differing views on the tipping point at which rising crude prices would fall out of favor with equities investors.

In the view of Mike Zarembski, senior commodities analyst at OptionsXpress, crude at $80 to $85 a barrel would take the steam out of an economic rally.

On Wall Street, energy shares fronted the broad market's advance to close out the week, with shares including Nabors Industries Ltd. (NBR) and Cameron International Corp. (CAM) both up nearly 5%.

The Dow Jones Industrial Average (DJI) added 146.31 points, or 1.5%, to 9,496.36, while the S&P 500 Index (SPX) climbed 16.86 points, or 1.7%, to 1,024.23. The Nasdaq Composite Index (RIXF) also rose, up 27.29 points, or 1.4%, to 2,016.3.