Oil Spill.

On Tuesday, Larry Kudlow told reporters in Washington that he and Trump have “discussed” the ramifications of the President’s tweets about oil.

I’m not sure what that “discussion” entailed, but what I do know is that the ramifications of Trump’s Monday tweet were pretty dramatic.

Whatever relief the market might have gotten from Sunday’s OPEC+ meeting (where delegates tipped possible production cuts to counter plunging prices) was negated entirely by the President’s thinly-veiled threat.

WTI was already nursing a record losing streak when, on Tuesday morning, the news got worse for oil bulls as OPEC’s monthly report found the cartel projecting deteriorating demand for its crude in 2019.

Ultimately, WTI settled more than 7% lower, for its worst day since September 1, 2015. It’s bad, you guys – it’s so bad.

WTI is the most oversold it’s ever been (literally) and the oil VIX (which had already spiked to its highest since 2016), exploded to the upside.

Unsurprisingly, short bets are rising and longs are being pared amid the deteriorating outlook – it will be interesting to see what the positioning data shows later this week, as it will capture the latest leg lower. Here’s a snapshot of where things stood through November 6.

(Bloomberg)

Not helping matters is obviously the stronger dollar, which, while slipping on Tuesday following the Brexit news, is still stuck near an 18-month high. Assuming the U.S. data doesn’t roll over entirely, the Fed is likely to stay the course, which will buoy the greenback further until everyone finally decides to focus on America’s worsening fiscal outlook and the prospects that in the next downturn, the Fed will be cutting rates while the government runs a massive deficit.

In any event, there’s not a whole lot to say about Tuesday’s dramatic plunge in crude that hasn’t already been said here and everywhere else, but you can bet that commodities strategists will be out in force on Wednesday attempting to explain things and trying desperately to figure out what comes next.

Unfortunately, the only “strategist” on Earth who has any answers is holed up in the White House, ricocheting through cable news and choking down a well done steak smothered in Heinz.