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Jim Cramer Says Oil Rout Is Battle Between the U.S. and Saudi Arabia

TheStreet's Jim Cramer says at the end of the day, the decline in global oil prices can be attributed to a standoff between the U.S. and Saudi Arabia.
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TheStreet's Action Alerts PLUS Co-Portfolio Manager Jim Cramer says at the end of the day, the decline in global oil prices can be attributed to a standoff between the U.S. and Saudi Arabia. Cramer said that in order for prices to climb, there has to be less production. On Tuesday, OPEC, which is responsible for 81 percent of world oil supplies, increased output by 100,700 barrels a day to 31.5 million in July. That figure is 1.5 million barrels a day higher than the 12-nation group's stated output ceiling that members endorsed back in June. The biggest oil producer of the cartel is Saudi Arabia which is flooding the market with oil in an effort to cause U.S. producers to scale back production. On Wednesday, the IEA announced that demand for oil is growing at the fastest pace in five years as the price drops. Cramer said, 'You can do destruction at the level of pumping the Saudis are doing. This is Saudi Arabia versus the United States. It’s Saudi Arabia versus the U.S. independent oil producers. Who is going to blink first? No one is blinking. If the Saudis blink, the independents go up big.'