Three independent oil companies have announced big capital expenditure cuts recently. So that means the oil boom in America is over and oil prices will go back up, right?
Think again, said Jim Cramer. The glut in oil cannot possibly be cleared up, especially when you look at the production figures slated for 2015.
On Wednesday, both Concho and Sanchez announced dramatic reductions to their capital expenditure budgets. Concho had planned for $3 billion and knocked it down to $2 billion. Likewise, Sanchez slashed its budget to $400 million-$450 million from $1.15 billion.
But here's the kicker: Concho is still planning on boosting production 20 percent from 16 percent. Sanchez is looking for 40 percent production growth in 2015.
"So let me ask you—how the heck can the price of oil go up if you cut your capital expenditures, pare back your drilling, and yet still tack on huge production increases?" Cramer asked, rhetorically.