As oil inventories rise and crude prices drop yet again, Jim Cramer thinks it is worth pointing out that oil has become a major battleground, and most of Wall Street is clueless.
“There’s a huge disparity in what we call sell-side forecasts right now, perhaps the largest lack of consensus I have ever seen,” said the “Mad Money” host on Thursday.
Cramer speculated that the discrepancies are partially due to oil analysts at large firms chasing oil as it went down, and reducing targets dramatically once the price dropped.
The reason why the significant range of estimates is important is because commodity projections are the most important key data point used when energy analysts issue ratings and estimates. Money managers use this information to conduct business, and it can make a big difference.
Case in point: The same brokerage houses can’t even figure out if oil has bottomed or if it is going to make a v-shaped or u-shaped recovery. Eight of the biggest firms have radically different opinions on the topic.
