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How Jim Cramer Is Approaching Oil

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Jim Cramer's Real Money column Wednesday morning focused on oil.

"But we aren't seeing that happen. If you are a huge user of oil, you can lock in prices out five years that are much lower than they are today. They haven't budged much at all. Why? wrote Cramer. He had three reasons. for this.

But, with the headlines out of Iran leading the markets, let's focus on one key reason:

"World growth, no matter how strong or muted, seems to produce little-to-no increase in oil use. The world used only 800,000 more barrels per day last year than the year before. Substitution, conservation, preservation, you name it, you can tell when you have a wasting asset on your hands," Cramer continued. 

When asked how Cramer would approach oil if he didn't manage the Action Alerts PLUS portfolio and if he were an Average Joe investor, Cramer responded:

"[Occidental Petroleum]'s been up every day for the last three weeks. If you wanted to speculate, you could do something like that. But, it's become a very small part of the S&P, and therefore it can be ignored entirely," said Cramer. 

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