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.