Oil seems to be playing limbo these days, with a game of just how low can it go. Jim Cramer views this as a position of panic, where everything will overreact and overshoot, including oil, and that is exactly what is happening right now.
There is a lot of oil sloshing around right now. Saudi Arabia continues to pump oil instead of cut production, and Cramer thinks they will keep on pumping away to take a price hit right now in order to drive down oil prices so that the U.S. doesn't become energy independent. Meanwhile, Libya is also putting out more oil than what the market expected, and the US continues full steam ahead adding more than a million barrels a year to the market place.
The fact of the matter, the supply is now overwhelming demand. Cramer sees that there just aren't enough storage tanks, refineries and oil tanks to put all of this oil in the U.S. On Tuesday, Cramer spoke with the CEO of Continental Resources, Harold Hamm, as well as the CEO of Cheniere Energy, Charif Souki.
Continental Resources is the largest player in the Bakken Shale, and Hamm did not rule out that oil can trade through the $70s. On the opposing perspective, Souki ruled it in, stating "I think the price of oil could go to $70, and maybe even lower. You need to look at will the U.S. export oil or not, because we seemed to be saturated with staying in the United States right now. The infrastructure simply cannot take the oil anymore from production to the refineries. We have saturated the ability to move one place to another."