Jim Cramer: Fear market that steady rise in oil prices will lead to a recession

• Jim Cramer explained why the increasing price of oil has Wall Street scared about a recession, pointing to a drop in energy stocks on Wednesday despite crude hitting a record high.
• “As long as oil prices keep climbing, it’s hard to make the case for a soft landing. Oil’s a nightmare for the Fed. It reverberates throughout the whole economy, and there seems to be no stopping it,” the “Mad Money” host said.

Jim Cramer explained why the increasing price of oil has Wall Street scared about a recession, pointing to a drop in energy stocks on Wednesday despite crude hitting a record high.

“As long as oil prices keep climbing, it’s hard to make the case for a soft landing. Oil’s a nightmare for the Fed. It reverberates throughout the whole economy, and there seems to be no stopping it,” the “Mad Money” host said. “Every time crude goes up, so do the odds of a recession,” he added.

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On Wednesday, oil prices touched a 13-week high. While energy companies in the S&P 500 gained slightly, only a few of the stocks were up.

“I don’t believe in the stagflation thesis,” Cramer said, referring to when the economy undergoes a slowdown while inflation and unemployment run high. “Ideally, we can wangle our way out of energy inflation with more supply” from American producers.

Cramer believes that if prices continue to rise, demand will be destroyed, leading to a recession as consumers cut back on overall spending, causing problems for the economy and politicians.

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“Even if we don’t get a lot more supply, the price of oil will eventually come down simply from demand destruction. But if it’s done that way, we could be in for a miserable, long, hot summer,” he added.