CNBC’s Jim Cramer wants investors to have the guts to go against the grain when it comes to investing, especially when it comes to the oil sector.
“Now that crude has come down to $68, I think, once again, you have to take the other side of the trade. You’ve got to buy the oils,” the “Mad Money” host said after shares of oil giants like Chevron slid in Monday’s trading session.
Cramer made this recommendation because, as he sees it, near-term oil supply won’t define crude’s long-term story. Even if some major oil producer like Russia or Saudi Arabia starts pumping more oil, over the longer term, there still could not be enough production to meet demand, he said.
“We heard from Core Lab last week and we’ve listened to Schlumberger talk endlessly about how drilling budgets really haven’t increased much at all. Some countries, like Venezuela and Mexico, continue to be in bleed-down mode,” Cramer said.
“If these producers don’t replenish their oil coffers, sooner or later, the price of crude is going sky-high, so those few oil companies and countries that are actually drilling will be rewarded with much higher prices,” he explained.
Source: CNBC
