馃攳
Saudi Arabia Seizes Oil Market By The Throat; Stock Market Shokes | Rachel Maddow | MSNBC - YouTube
Channel: MSNBC
[0]
joining us now here on set is John
[2]
Kilduff he's founder of the Kilda
[4]
Smokies publisher the kilduff report
[5]
he's a CNBC contributor who specializes
[7]
in energy trading in other words he is a
[9]
guy who explains what happens to oil in
[12]
the markets and boy John Kilduff are you
[15]
the guy I want to talk to today we've
[17]
seen the markets get battered over the
[20]
past couple of weeks of this coronavirus
[21]
crisis and then today something happens
[23]
between Russia and Saudi Arabia where
[26]
the price of oil goes through the floor
[28]
and that seems to have driven the even
[30]
bloodier day on Wall Street today is it
[33]
a coincidence that this oil thing
[34]
happened alongside the coronavirus thing
[36]
or are they related
[37]
I think the coronavirus was sort of the
[39]
predicate to this breakdown between
[42]
Saudi Arabia and Russian relationship
[45]
regarding managing or trying to manage
[47]
the oil market and the Russians in
[51]
particular I think have seen the US
[53]
shale and other producers nipping at
[55]
their heels in terms of market share
[57]
particularly Freeza V China as the
[60]
Russians and the Saudis were meeting
[61]
last week to determine how much oil
[64]
production they should cut back the u.s.
[67]
posted yet another record week of oil
[69]
production and raychel another
[72]
blockbuster not another but a
[74]
blockbuster week of cruel exports and
[76]
one of the biggest factors in that
[78]
number was a cargo of crude oil from the
[81]
Gulf of Mexico that isn't the shale
[83]
light sweet stuff that you hear about
[84]
but heavier sour stuff that competes
[86]
directly head-to-head with the kind of
[88]
crude Russia sells to their main
[90]
customer China so Russia said we've had
[93]
it and they told the Saudis as much and
[95]
the Saudis threw a hissy fit basically
[98]
and went nuclear over the weekend they
[101]
said they were going to bump up their
[103]
production next month over 10 million
[105]
barrels a day and that's a lot and they
[107]
also gave huge discounts imagine going
[109]
to you know Walmart and getting the blue
[111]
light special back in the day well
[113]
that's what's flashing over every Satya
[114]
oil tanker right now they cut their
[116]
selling price to all the major regions
[119]
of the world by over $10 a barrel which
[122]
was just a feat that none of us in the
[124]
market had ever seen before and the idea
[126]
is to make oil so cheap that Russia
[129]
can't make any money doing it so that
[130]
Russia breaks Russia's will and Russia
[133]
gets
[133]
with OPEC the way they want to deal with
[136]
crimp and demand and what they want to
[138]
do with production to address that that
[140]
and I also have to say that the US shale
[142]
is in the crosshairs with that move to
[144]
because nobody can come even close to
[147]
competing with Saudi Arabia in terms of
[149]
their cost of production it's in the
[151]
single digits in the Permian down in
[154]
Texas where this whole boom has been
[156]
sprung up over the past number of years
[158]
they really have to have $50 a barrel
[161]
maybe some of that can be as low as 40
[163]
or high thermal low 30 today oh yes they
[166]
went below 20 it went below 30 for a
[168]
time overnight that God is always $27 a
[170]
barrel at one point so the idea as the
[172]
price comes down in this Saudi Arabia
[174]
nears the price to come down are they
[176]
trying to force bankruptcies in the US
[179]
force I mean you can't really force the
[181]
Russian in just Russian oil industry to
[182]
go bankrupt because it's the Russian
[184]
state are they trying to force producers
[186]
out of the market or are they just
[187]
trying to change Russia's behavior or
[189]
both I think they'll be more than happy
[191]
to get Russia back in the fold but also
[193]
be somewhat happy to do some damage to
[195]
the higher cost US shale producers to
[198]
bring out some of that excess capacity
[199]
for four years now Saudi Arabia has been
[202]
carrying the load in terms of trying to
[204]
balance this oil market and keep prices
[207]
at a decent enough level for all of them
[209]
to sort of be happy and keep the home
[211]
fires burning and meet their or come
[213]
close to meeting what's called their
[215]
fiscal budgets their fiscal breakevens
[217]
for crude oil not the cost of production
[219]
breakeven or where they make money but
[220]
the money they need to support all their
[222]
government programs and keep everybody
[223]
happy this is a time that if Saudi was
[226]
ever going to do this this is a time
[227]
when the world is over well over a
[229]
barrel for them doing it but they could
[230]
have done this at any time any time at
[232]
all they have the market share they have
[234]
the market power this is for students of
[237]
history that I know probably watch your
[238]
show this is right out of Rockefellers
[240]
playbook the beauty rose theory where
[243]
you just low price lowball price the
[246]
competition and wipe them out that's
[248]
what the Saudis have the power to do in
[249]
this market and that's what they're
[250]
doing right now
Most Recent Videos:
You can go back to the homepage right here: Homepage