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You're listening to taking stock with

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pim Box at Kathleen Hayes on

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Bloomberg Radio. Oil

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prices posting a third weekly

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gain as the potential for a production

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freeze deal among major producers

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outweighing concerns about ample

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inventor is here to tell us more? John Kilda,

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founding partner of Again Capital.

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All right, John, great to have you with us. Are

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we going to see oil prices continue

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to move higher? I

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think in the short run we will go a bit higher. Pim

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that the market got caught short

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in the face of some comments by the

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new Saudi oil minister. Uh

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and the short covering is is underway

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with with abandon right now, so I think we still

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have some more to go before we can head back lower again.

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All right, what is going to cause the

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lower prices after this short

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covering? Well,

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again, you know that the market got to a record

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short position. So whenever the book

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gets floated to one side, I like to say

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it has to revert um. But I think

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as long as put the price rally fails at

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fifty or fifty two, we'll go back down. The

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reason we're going to go back down is because

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for all the talk of a freeze, and all the talk of

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cooperation among OPEC, Russia and maybe

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some other countries, there's just keeps seeing

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more and more oil coming to the market. The

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Saudis are at a record export level

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of crudal and refined products. The

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Chinese are continuing to ramp up their

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export of refined products, brush

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at and all time high. Northern Iraq

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oil productions came back online

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for the first time in months chest today. Olibians

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are starting to get their oil after the market again as

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well as Nigerians can get their act

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together. It's just another wave of oil

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for this market so that it has nowhere to go. But then

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and John countries such as Venezuela,

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they're looking to increase or to

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export more oil because

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that's a hard currency earner. Absolutely,

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Pim and you know, and they in Venezuela that you just

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mentioned, they certainly are the basket case among

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the producers right now. With their economy teetering

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on imploding completely. Their their oil

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production actually is somewhat challenged, so that

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is something of a supportive feature. And I know you've

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probably been talking about this all day, but the weakness

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and the dollar has had a big effect

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on on dollar denominated oil prices. As

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well as that dollar falls, it props up oil

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prices, so that too is a factor

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right now. What role is Iran playing

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in the oil industry?

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Well interesting, I was at

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the last meeting, at the last goal around of this freeze

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uh nonsense. I

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was convincent deal would not come together. I

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thought maybe this time that there was a chance for

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a deal because the Iranians are pretty

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much back to their pre sanctioned

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output levels in terms of crude oil production.

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But they have just said that they probably

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won't attend the meeting in Algeria next

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month where they're hoping to get this deal cobbled

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together. And also to their recent

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allowance of Russia to use

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an air base within Iran to strike Syria

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is really a stick on the eye of the facialities

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once again. So there's no coming

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together between those two name uh

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fat players in OPEX, and without

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that there will be no deal. John, you

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mentioned Nigeria production and I

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wonder if you could tell us a little bit about why

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it is at a twenty seven year low

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and what's going to happen next. So

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where the oil is in Nigeria is in the southern

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part of the country. You're on the coastlines called

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the Nigeria Delta, and from

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time to time the indigenous folks down there

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raise up rise up in protests

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and rebel and bomb and attack the oil

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infrastructure because they don't get their their fair

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share of the pie as they as they see

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it. The new government that came in their cut

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payments to the various groups

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there, and what you think would

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happened happens, and so there's been attacks on the

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infrastructure and they've been a pretty dedicated

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bunch there that has helped not oil output

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offline, but that the government has reversed

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course, has begun making payments, their

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serious negotiations under way so

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that oil output could rebound as

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quickly as it went offline. I

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like the point now that this is not the

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Fokohoram and other um sectarian

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sort of upset that you have in the northern part

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of the country. This is strictly all about

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petro dollars john at a price

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of around forty eight dollars a barrel

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for West Texas and fifty dollars a barrel

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for Brent crude, at what point

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do US producers start pumping

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more oil? Well,

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they've done an incredible job. Now over the past,

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you're driving their costs down. There are

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a number of areas now where they're profitable

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at thirty five dollars a barrel. Uh.

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You might have noticed today that the rig count

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Bakers use rick Cant was up again, I think for

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the fourth straight week. It's fact. I think they added ten

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right, they added ten riggs, ten

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more riggs. It's up about almost now

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off it's low from March, so they've been

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racing riggs back into service. And

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earlier this week it was partly due to

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an adjustment, but the e i A told

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us that US production has jumped

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the most it has since May, undred

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and fifty thousand barrels a day, which is not

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insignificant. So they're

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on the comeback trail really as we speak.

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Just getting over four dollars of barrel seems to

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invite it some hopeful analysis among

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the sector to get back in, get

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back in the ground, and get drilling again. To give

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you some numbers for it, uh, the number

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of rigs drilling for oil in the United

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States has climbed for eight

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consecutive weeks. It rose about four rigs

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for the for the week for the first time

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since February. This all according to

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Baker Hughes Uh. John, explain

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what happens with refiners

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because they're switching over from

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gasoline production to h

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heating oil. Correct, that's

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correct. And they're also switching over from a

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summer grade gasoline to winter grade gasoline,

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which is easier to make. And then we

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had an abundance of that coming out of last

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winter, which helps get the pump prices

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really low come February when they had to switch

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out. So it's gonna happen now, Tammy.

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You're going to see the refiners cut their runs,

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their their their util station rate, and

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of course that's going to cause crude oil

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be less in demand back up in the

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system. And this is why over the course of the next couple

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of months you could see a real breakdown again, just

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as we saw last year, as the glut

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just enlarges and gets bigger

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and bigger and uh and and really the global

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market gets swamp again. I want to thank you

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very much John Kildoff, he is

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the founding partner of Again

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Capital, giving us his view

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on the oil markets with oil

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posting a third weekly gained.

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I want to thank you all for listening to taking

6:33

Stock. My thanks to our engineer Reggie

6:35

Basil, our producer Marx and Escalche.

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I'm pim Fox and this is

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Bloomberg.