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00:00. . YOU ARE IN SAUDI. I SPOKE TO ON THURSDAY. IMPLOSION WOULD BE THE UNDERSTATEMENT. $20 ON THE CARD. IS IT AND WHAT NEEDS TO HAPPEN TO TAKE US THERE. ? GOOD MORNING. > > GOOD MORNING. GOOD TO TALK WITH YOU. THE RUSSIAN FINANCE MINISTER WAS REASSURING FOLKS, SAYING WE CAN LIVE EVEN AT $30 A BARREL FOR OIL. WHAT I THINK HE IS GOING TO LEARN IS, WITHOUT A SWING PRODUCER, AND GIVEN THE DEMANDS AND TRACTION, WE ARE HEADED TO CLOSE AT A THREE DOLLARS A BARREL THAN 30. LIKE AT 20, 25, RUSSIA CRIED UNCLE AT $26 A BARREL. THE RUBY SOME OF THAT IN FEBRUARY OF 2016. THE POINT IS, RUSSIA UNFORTUNATELY HAS TO TOUCH THE STOVE AND IS GOING TO LEARN THAT , AND IN UNBALANCED MARKET LIKE WE HAVE NOW, WHEN YOU SUDDENLY DON ' T HAVE A SWING PRODUCER, YOU HAVE A PRECIPITOUS FALL IN OIL CRISIS. WHICH REALLY HAS NO FLOOR INSIGHT. MANUS: ARE YOU FOR REAL, THREE DOLLARS? BOB: IT IS GOING TO SHUT IN COSTS. ON A DAILY PRINT WE WILL GO TO WHATEVER LEVEL IT TAKES TOUR YOU LOSE VALUE BY BRINGING A BARREL OF OIL OUT OF THE GROUND. WE WILL FILL ALL AVAILABLE STORAGE FOR REFINED PRODUCTS AND CRUDE. THIS IS JUST THE WAY THE HYDRAULICS OF THE OIL MARKET WORKS. IT IS NOT VERY COMPLICATED. IF WE ACTUALLY INCREASE SUPPLY, WHICH I THINK THE SAUDI ' S WILL DO -- YEP. MANUS: I HAVE AN IB ON THE GO. A CHAT WITH YOUR FRIEND. OUR RESIDENT OIL EXPERT. THE QUESTION FROM HIM. ARE YOU READY? BOB: YES. MANUS: TRUMP IS GOING TO ASK THE SAUDI ' S TO ABANDON THE WAR AS BUSH DID AS VICE PRESIDENT IN 1986. THIS IS WHAT YOU CALL DEPTH OF KNOWLEDGE. WILL TRUMP ASK THE SAUDI ' S TO PULL THE PLUG ON THIS PRICE WAR AS BUSH DID IN 1986? BOB: ULTIMATELY, I THINK YOU WILL, BUT IT WILL BE DIFFERENT THEN VICE PRESIDENT GEORGE H BUSH WHO TALK TO THE PRESS AS HE WAS BOARDING THE PLANE FOR RIYADH BACK THEN. I THINK THE ADMINISTRATION WILL DO IT MORE QUIETLY AND AT MUCH LOWER LEVELS. REMEMBER, THE FIRST FEELING IS GOING TO BE EUPHORIA AS GASOLINE PRICES DROP. THE ECONOMY WILL GET A STIMULUS. IT IS ONLY WHEN WE GET SLOWER AND MICHELLE PAS ROLLS OVER AND BANKS COME INTO PLAY IS WHEN YOU WILL SEE MORE QUIET MESSAGING TO THE SAUDI ' S. I DON ' T EXPECT A PUBLIC MESSAGE, BUT AT SOME POINT FOLKS HAVE TO WORRY ABOUT THE STABILITY AND THE BROADER ECONOMY AND THE U.S. ENERGY SECTOR. MANUS: DO THINK THE WHITE HOUSE IS WORRIED ABOUT SHELL? IT IS GREATER TIME FOR SHALE OR WE ARE SUB 50 AND COUNTING THIS MORNING. THE RAMIFICATIONS FOR SHALE PLEASE? BOB: THEY ARE VERY NEGATIVE. LET ' S REMEMBER, SHALE WAS ALREADY SORT OF UNDER THE WEATHER COMING INTO THE YEAR. SO MOST FOLKS EXPECTED, INCLUDING DOB, A SHARP SLOWDOWN IN SHALE GROWTH. THIS WILL ONLY DELIVER A GUT PUNCH TO A PATIENT WHO WAS ALREADY QUITE SICK. THEY ARE VERY WORRIED ABOUT IT. LOUISIANA IS A VERY IMPORTANT STATE. TEXAS IS AN IMPORTANT STATE. IT IS NEWFOUND AND CELEBRATED BY THE TRUMP ADMINISTRATION. THIS THREATENS TO RIPPLE WAY THE ENERGY INDEPENDENCE. I THINK THERE WILL BE CONCERNED. FIRST, LOWER CRISIS -- PRICES. AS WE GO LOWER, CONCERN WILL GROW. .

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Could Oil Fall to $3 a Barrel?

Bob McNally, president of Rapidan Energy Group, talks about the plunge in oil following the breakdown of talks between OPEC and Russia on how to manage the world’s supply. He speaks with Manus Cranny on "Bloomberg Daybreak: Europe." (Source: Bloomberg)

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