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Cramer Remix: What’s driving oil’s massive liquidation

Jim Cramer congratulated oil speculators for getting the oil market dead wrong. Again.

According to the Commodity Futures Trading Commission's weekly commitment of traders report, large speculators, meaning money managers, were holding a net long position of 525,000 futures contracts just before oil dropped. They were betting on a huge spike in the price of crude.

Carley Garner is a commodities expert and co-founder of DeCarley Trading, and said the position far exceeds the net-long position that speculators had prior to the massive oil decline in 2014.

Garner said the odds favor a decline in the multi-year trend line of $47.50, but could potentially touch $44.30.

With so many factors swirling in the oil patch right now concerning OPEC, production freezes, Russia and Iran, Cramer pointed to the massive inventory of crude as the most important issue on traders' minds.

The U.S. crude inventory rose to 528 million barrels in the latest weekly petroleum status report, the largest since record keeping began.

"That is what is driving the massive liquidation we are currently seeing. The speculators must have believed that OPEC would starve the market and we would stop producing at levels that weren't economic for most of our exploration and production companies," Cramer said.

An oil worker stands by a rig near Williston, North Dakota.
Brad Quick | CNBC
An oil worker stands by a rig near Williston, North Dakota.

Shares of Tech Data rose more than 4 percent on Thursday, making up for the gains lost when it reported a mixed quarter.

Cramer found the quarter to be pretty solid. It posted a 28 cent earnings beat from a $2.17 basis, even as sales came in a bit light, down 1 percent year over year. What really threw off investors was the guidance, as management said it wouldn't provide an outlook for the next quarter or the next fiscal year because it had just completed its acquisition of Avnet's technology solutions business, and it was too soon to estimate.

However, management did reiterate that they believe the deal will provide a big boost to Tech Data's earnings. Cramer spoke with Tech Data's CEO Bob Dutkowsky, and pointed out that with an operating cash flow of $650 million, it can pay down debt for its acquisitions.

"We hope to get that debt paid down in the next 18 to 24 months, and our goal is to keep our investment grade rating with the agencies. They understand our plan and we have reviewed with them and they are very comfortable with not only the debt, but our plan to pay it down," Dutkowsky said.

Cramer is tired of hearing that the stock market's gains since the bottom of the Great Recession are only because of monetary policies put in place by the Federal Reserve.

"It is a bogus story that presents the whole move as a castle in the sand that could be washed away by the wave of the Fed's impending rate hikes," he said.

In response to the market turmoil, the Fed aggressively cut interest rates to entice commerce in the U.S. However, Cramer disagreed with the notion that gains made since the Haines bottom were simply due to the Fed's actions. To prove his case, he reviewed the gains of the 10 best performers in the S&P 500.

Traders work on the floor of the New York Stock Exchange as Federal Reserve Chairwoman Janet Yellen speaks to the media.
Getty Images
Traders work on the floor of the New York Stock Exchange as Federal Reserve Chairwoman Janet Yellen speaks to the media.

Columbia Sportswear's CEO Tim Boyle is not impressed with President Trump's proposal of a border adjustment tax.

"This is going to be bad not only for the consumers of the United States, but it's going to be bad for companies that do business internationally because we will all be punished," Boyle said.

Columbia Sportswear is the 49th largest payer of U.S. import duties out of more than 375,000 American importers. More than 40 percent of Columbia's business is derived outside of the U.S., and Boyle says he expects retribution from trade partners if a border tax is imposed.

Columbia Sportswear is the footwear and apparel company behind various brands such as Columbia, Sorel, Mountain Hardware and PrAna.

In the Lightning Round, Cramer gave his take on a few stocks from callers:

Macy's: "We are trying to really cut back on retail here, OK. Really cutting back. Just not where I want to be."

Annaly Capital Management: "That is a reach for yield situation. I'm getting comfort that they are doing well, but you know what, I don't like to reach for yield ... I'm going to take a pass on it."