This was originally published on RealMoney. It is being republished as a bonus for TheStreet.com readers.
It ain't a hurricane that controls oil. It is China. It isn't terrorism that controls oil. It is China. It isn't the lack of new finds that controls oil. It is China.
I know that there is a correlation between the dollar and oil, and I know that people flee to commodities when the dollar is weak.
But you have to marvel that oil can't get off this level with hurricanes being thrown at the Gulf left and right.
Here's how I feel about it: I believe that oil must be headed much lower, or you could not get this type of action. It has to, because China has simply stopped buying anything.
I urge people to recognize that the speculators certainly accentuated and exacerbated any moves in oil that might have been bullish, but the underlying bullish tendency was because of China, not any of the extraneous issues.
Now, one other possible thought about oil. One reason the natural gas stocks can't seem to lift is that there is a growing recognition that Boone Pickens is right: There's a surfeit of
out there, and if we switch, it will kill oil.
That's the long-term reason why even if China comes back, I don't trust oil here, not at all. It is also the reason why you can see the
mob moving up, as well as any other company that consumes energy.
This was originally published on
on September 8, 2008. For more information about subscribing to
please click here.
TheStreet.com TV Rewind
From Cramer: Don't Be Fooled by Dollar-Oil Excuses (Video, Jul. 2):
Cramer: "Oil has nothing to do with the dollar, other than a miniscule amount of pricing... This thesis has cost you billions... It has made you focus on the dollar as opposed to focusing on supply and demand. It has made you feel that the U.S. is the 'swing vote' in oil. It's clearly not. The swing vote is China."
To watch the video, click the player below:
var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1631265746; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);
At the time of publication, Jim Cramer had no positions in the stocks mentioned. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer),"
click here. Click
here to order "Mad Money: Watch TV, Get Rich," click
here to order "Real Money: Sane Investing in an Insane World," click
here to get "You Got Screwed!" and click
here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by
TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.