. >>> JOINING US NOW HERE ONSET IS

>>> JOINING US NOW HERE ONSET IS JOHN KILDOFF AND A CNBC

JOHN KILDOFF AND A CNBC CONTRIBUTOR THAT SPECIALIZES IN

CONTRIBUTOR THAT SPECIALIZES IN ENERGY TRADING.

ENERGY TRADING. HE’S A GUY THAT EXPLAINS WHAT

HE’S A GUY THAT EXPLAINS WHAT HAPPENS TO OIL IN THE MARKET AND

HAPPENS TO OIL IN THE MARKET AND BOY, ARE YOU THE GUY I WANT TO

BOY, ARE YOU THE GUY I WANT TO TALK TO TODAY.

TALK TO TODAY. WE SEEN THE MARKETS GET BATTERED

WE SEEN THE MARKETS GET BATTERED OVER THIS CORONAVIRUS AND TODAY

OVER THIS CORONAVIRUS AND TODAY SOMETHING HAPPENS WHERE THE

SOMETHING HAPPENS WHERE THE PRICE OF OIL GOES THROUGH THE

PRICE OF OIL GOES THROUGH THE FLOOR AND HAS DRIVEN THE EVEN

FLOOR AND HAS DRIVEN THE EVEN BLOODIER DAY ON WALL STREET

BLOODIER DAY ON WALL STREET TODAY.

TODAY. IS IT A COINCIDENCE THIS

IS IT A COINCIDENCE THIS HAPPENED ALONGSIDE THE

HAPPENED ALONGSIDE THE CORONAVIRUS THING OR ARE THEY

CORONAVIRUS THING OR ARE THEY RELATED?

RELATED? >> I THINK THE CORONAVIRUS WAS

>> I THINK THE CORONAVIRUS WAS THE PREDICATE TO THIS BREAKDOWN

THE PREDICATE TO THIS BREAKDOWN BETWEEN SAUDI ARABIA AND RUSSIAN

BETWEEN SAUDI ARABIA AND RUSSIAN RELATIONSHIP REGARDING MANAGING

RELATIONSHIP REGARDING MANAGING OR TRYING TO MANAGE THE OIL

OR TRYING TO MANAGE THE OIL MARKET.

MARKET. AND THE RUSSIANS IN PARTICULAR I

AND THE RUSSIANS IN PARTICULAR I THINK HAVE SEEN THE U.S. SHALE

THINK HAVE SEEN THE U.S. SHALE AND OTHER PRODUCERS NIPPING AT

AND OTHER PRODUCERS NIPPING AT THEIR HEELS IN TERMS OF MARKET

THEIR HEELS IN TERMS OF MARKET SHARE, PARTICULARLY CHINA.

SHARE, PARTICULARLY CHINA. AS THE RUSSIANS AND THE SAUDIS

AS THE RUSSIANS AND THE SAUDIS WERE MEETING LAST WEEK TO

WERE MEETING LAST WEEK TO DETERMINE HOW MUCH OIL

DETERMINE HOW MUCH OIL PRODUCTION THEY SHOULD CUT BACK,

PRODUCTION THEY SHOULD CUT BACK, THE U.S. POSTED YET ANOTHER

THE U.S. POSTED YET ANOTHER RECORD WEEK OF OIL PRODUCTION

RECORD WEEK OF OIL PRODUCTION AND RACHEL, ANOTHER BLOCKBUSTER,

AND RACHEL, ANOTHER BLOCKBUSTER, NOT ANOTHER BUT A BLOCKBUSTER

NOT ANOTHER BUT A BLOCKBUSTER WEEK OF CRUDE OIL EXPORTS AND

WEEK OF CRUDE OIL EXPORTS AND ONE OF THE BIGGEST FACTORS IN

ONE OF THE BIGGEST FACTORS IN THAT NUMBER WAS A CARGO OF CRUDE

THAT NUMBER WAS A CARGO OF CRUDE OIL FROM THE GULF OF MEXICO THAT

OIL FROM THE GULF OF MEXICO THAT ISN’T THE SHALE LIGHT SWEET

ISN’T THE SHALE LIGHT SWEET STUFF YOU HEAR ABOUT BUT HEAVIER

STUFF YOU HEAR ABOUT BUT HEAVIER SOUR STUFF THAT COMPETES

SOUR STUFF THAT COMPETES DIRECTLY HEAD-TO-HEAD WITH THE

DIRECTLY HEAD-TO-HEAD WITH THE KIND OF CRUDE RUSSIA SELLS TO

KIND OF CRUDE RUSSIA SELLS TO THEIR MAIN CUSTOMER CHINA.

THEIR MAIN CUSTOMER CHINA. SO RUSSIA SAID WE’VE HAD IT AND

SO RUSSIA SAID WE’VE HAD IT AND THEY TOLD THE SAUDIS AS MUCH AND

THEY TOLD THE SAUDIS AS MUCH AND THE SAUDIS THREW A HISSY FIT AND

THE SAUDIS THREW A HISSY FIT AND WENT NUCLEAR OVER THE WEEKEND.

WENT NUCLEAR OVER THE WEEKEND. THEY SAID THEY WILL BUMP UP

THEY SAID THEY WILL BUMP UP THEIR PRODUCTION NEXT MONTH OVER

THEIR PRODUCTION NEXT MONTH OVER 10 MILLION BARRELS A DAY.

10 MILLION BARRELS A DAY. REMEMBER THE BLUE LIGHT AT

REMEMBER THE BLUE LIGHT AT WALMART?

WALMART? THEY CUT THEIR SELLING PRICE TO

THEY CUT THEIR SELLING PRICE TO THE REGIONS IN THE WORLD BY OVER

THE REGIONS IN THE WORLD BY OVER $10 A BARREL, WHICH WAS JUST A

$10 A BARREL, WHICH WAS JUST A FEAT THAT NONE OF US IN THE

FEAT THAT NONE OF US IN THE MARKET HAD EVER SEEN BEFORE.

MARKET HAD EVER SEEN BEFORE. >> THE IDEA IS TO MAKE OIL SO

>> THE IDEA IS TO MAKE OIL SO CHEAP THAT RUSSIA CAN’T MAKE ANY

CHEAP THAT RUSSIA CAN’T MAKE ANY MONEY DOING IT SO THAT RUSSIA

MONEY DOING IT SO THAT RUSSIA BREAKS RUSSIA’S WILL AND RUSSIA

BREAKS RUSSIA’S WILL AND RUSSIA GETS IN LINE WITH OPEC THE WAY

GETS IN LINE WITH OPEC THE WAY THEY WANT TO DEAL WITH THE CRIMP

THEY WANT TO DEAL WITH THE CRIMP AND DEMAND AND WHAT THEY WANT TO

AND DEMAND AND WHAT THEY WANT TO DO WITH PRODUCTION TO ADDRESS

DO WITH PRODUCTION TO ADDRESS THAT?

THAT? >> THAT AND I ALSO HAVE TO SAY

>> THAT AND I ALSO HAVE TO SAY THE U.S. SHALE IS IN THE CROSS

THE U.S. SHALE IS IN THE CROSS HAIRS WITH THAT MOVE, TOO,

HAIRS WITH THAT MOVE, TOO, BECAUSE NOBODY CAN COME EVEN

BECAUSE NOBODY CAN COME EVEN CLOSE TO COMPETING WITH SAUDI

CLOSE TO COMPETING WITH SAUDI ARABIA IN TERMS OF THEIR COST OF

ARABIA IN TERMS OF THEIR COST OF PRODUCTION.

PRODUCTION. IT’S IN THE SINGLE DIGITS.

IT’S IN THE SINGLE DIGITS. DOWN IN TEXAS WHERE THIS WHOLE

DOWN IN TEXAS WHERE THIS WHOLE BOOM HAS BEEN SPRUNG UP OVER THE

BOOM HAS BEEN SPRUNG UP OVER THE PAST NUMBER OF YEARS, THEY

PAST NUMBER OF YEARS, THEY REALLY HAVE TO HAVE $50 A

REALLY HAVE TO HAVE $50 A BARREL, MAYBE SOME AS LOW AS

BARREL, MAYBE SOME AS LOW AS 40 --

40 -- >> I WENT BELOW $30 TODAY.

>> I WENT BELOW $30 TODAY. >> IT WENT BELOW 30 FOR A TIME

>> IT WENT BELOW 30 FOR A TIME OVERNIGHT.

OVERNIGHT. THEY GOT AS LOW AS $27 A BARREL

THEY GOT AS LOW AS $27 A BARREL AT ONE POINT.

AT ONE POINT. >> AS THIS PRICE GOES DOWN AND

>> AS THIS PRICE GOES DOWN AND THIS SAUDI ENGINEERS THE PRICE

THIS SAUDI ENGINEERS THE PRICE TO COME DOWN, ARE THEY TRYING TO

TO COME DOWN, ARE THEY TRYING TO FORCE BANKRUPTCIES IN THE U.S.

FORCE BANKRUPTCIES IN THE U.S. FORCE -- YOU CAN’T FORCE THE

FORCE -- YOU CAN’T FORCE THE RUSSIAN OIL INDUSTRY TO GO

RUSSIAN OIL INDUSTRY TO GO BANKRUPT BECAUSE IT’S THE

BANKRUPT BECAUSE IT’S THE RUSSIAN STATE.

RUSSIAN STATE. ARE THEY TRYING TO FORCE THEM

ARE THEY TRYING TO FORCE THEM OUT OF THE MARKET OR CHANGE

OUT OF THE MARKET OR CHANGE RUSSIA’S BEHAVIOR OR BOTH?

RUSSIA’S BEHAVIOR OR BOTH? >> THEY ARE MORE THAN HAPPY TO

>> THEY ARE MORE THAN HAPPY TO GET RUSSIA BACK IN THE FOLD BUT

GET RUSSIA BACK IN THE FOLD BUT BUT SOMEWHAT HAPPY TO DO DAMAGE

BUT SOMEWHAT HAPPY TO DO DAMAGE TO THE HIGHER COST U.S. SHALE

TO THE HIGHER COST U.S. SHALE PRODUCERS AND RING OUT EXCESS

PRODUCERS AND RING OUT EXCESS CAPACITY.

CAPACITY. FOR YEARS NOW SAUDI ARABIA HAS

FOR YEARS NOW SAUDI ARABIA HAS BEEN CARRYING THE LOAD IN TERMS

BEEN CARRYING THE LOAD IN TERMS OF TRYING TO BALANCE THE OIL

OF TRYING TO BALANCE THE OIL MARKET AND KEEP PRICES AT A

MARKET AND KEEP PRICES AT A DESCENT ENOUGH LEVEL FOR ALL OF

DESCENT ENOUGH LEVEL FOR ALL OF THEM TO SORT OF BE HAPPY AND

THEM TO SORT OF BE HAPPY AND KEEP THE HOME FIRES BURNING AND

KEEP THE HOME FIRES BURNING AND MEET THEIR OR COME CLOSE TO

MEET THEIR OR COME CLOSE TO MEETING OR CALL THEIR FISCAL

MEETING OR CALL THEIR FISCAL BUDGETS, THEIR FISCAL BREAK

BUDGETS, THEIR FISCAL BREAK EVENS FOR CRUDE OIL, NOT THE

EVENS FOR CRUDE OIL, NOT THE COST OR PRODUCTION BUT THE MONEY

COST OR PRODUCTION BUT THE MONEY THEY NEED TO SUPPORT OIL OR

THEY NEED TO SUPPORT OIL OR GOVERNMENT PROGRAMS AND KEEP

GOVERNMENT PROGRAMS AND KEEP EVERYBODY HAPPY.

EVERYBODY HAPPY. >> THIS IS A TIME IF SAUDI WAS

>> THIS IS A TIME IF SAUDI WAS EVER GOING TO DO THIS, THIS IS A

EVER GOING TO DO THIS, THIS IS A TIME THE WORLD IS OVER A BARREL.

TIME THE WORLD IS OVER A BARREL. THEY COULD HAVE DONE THIS AT ANY

THEY COULD HAVE DONE THIS AT ANY TIME.

TIME. >> ANY TIME AT ALL.

>> ANY TIME AT ALL. THEY HAD THE MARKET SHARE AND

THEY HAD THE MARKET SHARE AND POWER.

POWER. THIS IS FOR STUDENTS OF HISTORY

THIS IS FOR STUDENTS OF HISTORY THAT WATCH YOUR SHOW, THIS IS

THAT WATCH YOUR SHOW, THIS IS RIGHT OUT OF ROCKEFELLER’S

RIGHT OUT OF ROCKEFELLER’S PLAYBOOK.

PLAYBOOK. THE BEAUTY ROSE THEORY WHERE YOU

THE BEAUTY ROSE THEORY WHERE YOU LOWBALL PRICE THE COMPETITION