February 24, 2016 – Real Money
Jim Cramer Calls Saudi Arabia, Russia Oil Deal a Hoax
By: Jim Cramer
It was always a hoax. That's what I have to say about the so-called deal between Saudi Arabia and Russia to limit oil production to slightly more than 10 million barrels each if Iraq and Iran don't raise their production further than current levels roughly between 3.5 million and 3.25 million barrels a day.
It was always the stated goal of both Iraq and Iran to dramatically raise production, which would then put pressure on Russia and the Saudis to raise, too.
So I don't know why anyone would possibly be shocked when the Iranian oil minister last night called the proposal ridiculous, especially because of the billions in oil contracts being let to oil service and oil companies to boost production in that now unsanctioned country.
Given that this whole chimerical agreement was struck when oil was at $26, causing short covering to the $33 level, it seems realistic to expect oil to go back down to that level or even further now that Iran has ridiculed the proposal.
Now, there's an overwhelming sense from pretty much everyone I hear on air that we should expect very big declines in North American energy production that could somehow allay fears that the decline will accelerate in 2016.
But the figures, according to RBN -- the only outfit that has gotten it right so far, run by Rusty Braziel, author of the best-selling book The Domino Effect -- show only a very slight decline in production, because of all of the oil coming on from the Gulf of Mexico, where post-Macondo projects are just ramping up; we are getting an acceleration of heavy crude coming from Canada too, as the oil sands gook finally flows in earnest, even as the companies are making nothing per barrel or even losing some in their inability to turn off the valves.
Read the full article here: http://www.thestreet.com/story/13470762/1/jim-cramer-calls-saudi-arabia-russia-oil-deal-a-hoax.html
