Why Jim Cramer Expects Oil Prices Will Try to Settle in The Mid $60 Range

NEW YORK (TheStreet) -- Oil prices have been dropping recently, and TheStreet's Jim Cramer says the secret to oil is U.S. production.

Cramer says the numbers have lagged, but he thinks people will be surprised when they see the step up in the figures for November production. He says the U.S. and Saudi Arabia are "flooding the world with oil."

Cramer notes the uses for oil have come down in the U.S., but America is still a gigantic user of oil and it is a plus that oil prices have declined. But he adds that investors will have to deal with some over-stretched balance sheets from some companies. He says all you have to do is look at the companies that have had the biggest declines because many of them have giant loan burdens from buying oil properties at what looked to be the top.

Must Watch: Jim Cramer Says He Sees Oil Settling in the Mid $60 Range

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Cramer adds there will be a lot of compression in the oil stocks' balance sheets, but he otherwise anticipates smooth sailing for the consumer. He predicts oil will try to settle in the mid-$60 range. He says there could be one last quick dip into the $50 range and then a bounce back, but he would not bet that way.

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STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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