NEW YORK (TheStreet) — Shares of Continental Resources (CLR) were up over 21% Wednesday. OPEC members agreed to reduce production by 1.2 million barrels a day to 32.5 million a day to help with the global oil glut that’s been weighing on prices, Bloomberg reports. Oil prices are up over 8% today.
Oil prices are moving so dramatically because “no one was prepared for this level of cut,” TheStreet’s Jim Cramer said on CNBC’s “Squawk on the Street” earlier Wednesday. “The oil futures guys got this totally wrong,” he claimed. “They were on the wrong side. That’s why it’s moving.”
In less than 72 hours, we went from thinking we would get a freeze in production at the highest level to thinking we’re getting “bigger cuts than anyone expected,” he explained. “What we’re hearing is probably the most bullish outcome you could have,” Cramer said.
What a deal like this means is that the U.S. is the “real winner” because it’s now “free” to start producing more oil without having to worry about “destroying” the price, he noted. “What we’re seeing is kind of the best of all possible worlds this morning for U.S. oil companies.”
Oil prices will get to $50 on the deal, and the rig count will go up, he added. “If you’re short one of our U.S. oil companies, wow, you got the wrong side of the trade.”
Domestic oil companies will move up more than international oil companies, and Continental Resources is “emblematic of all domestic,” Cramer noted. The company is also in the SCOOP play in Oklahoma where you can “make a fortune at $50,” he said. “So that one makes sense to be up a lot.”