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.'
More from Video
How quickly do we find support, is what we'll want to know now, as the correction is occurring while economic optimism builds.
Despite the president's promise of no stimulus until after Nov. 3, there are no signs yet that this is the sort of correlated selling that leads to a deep correction.
Salesforce, Amgen and Honeywell will give a lift to the DJIA going forward.
CAG has hung onto the bulk of its recent gains, and could rise to the $50 area, according to the charts and indicators.