One of the hottest trades of the year is over, according to CNBC's Jim Cramer. West Texas Intermediate crude has staged a record run since January — gaining 50% — but Cramer says prices have now peaked. "I'm calling the top right here in oil," the "Mad Money" host said Thursday on "Squawk on the Street." "You can hang me on it — I'm willing to take it," he added. He believes U.S. companies will begin to bring production back online, and he sees output from the Permian Basin rising by one million barrels per day. This jump in supply comes on the heels of OPEC and its oil-producing allies reportedly nearing a deal that would also boost production. "The economy is not going to be able to handle it. The economy doesn't have that much demand, so there will be a tipping point on supply," Cramer said. West Texas Intermediate crude futures rose to a more than six-year high of $76.98 last week, but enthusiasm has since cooled. On Thursday, the contract traded about 1% lower at $72.53 per barrel. Oil's blistering comeback this year has been fueled by producers worldwide curbing output, while demand has recovered as global economies reopen. The International Energy Agency said Tuesday in its monthly oil market report that demand "surged" by around 3.2 million barrels per day in June to a total of 96.8 million barrels per day. Supply, on the other hand, rose by 1.1 million barrels per day, bringing total production to 95.6 million barrels per day. Amid the demand recovery and supply constraints some, including Bank of America, have called for $100 oil. "With the oil market likely to remain in deficit due to this rapid sequential demand increase, we expect pressure on inventories to continue. In our projections, the oil market will likely remain in deficit for the foreseeable future, averaging a shortfall of 0.9 million barrels per day over the next six quarters," the firm said in June in a note to clients. UBS anticipates the market cooling in the back half of the year, but believes oil still has steam for the time being. "With the oil market already in deficit and demand growth outpacing supply growth, the crude market will likely tighten further this summer," UBS wrote in a note to clients Thursday. The firm believes WTI will trade at $77 between now and September, while Brent will reach $80. Brent , the international benchmark, dipped 1% to $74.12 on Thursday. Towards the end of the year, UBS sees WTI at $72, with Brent at $75.
Scott Mlyn | CNBC
One of the hottest trades of the year is over, according to CNBC's Jim Cramer.