then it's going to be a real bleak situation. >> and john kilduff founding partner with again capitals back. >> he's wearing his lucky shirt. did you notice that? it's the same shirt he had on. >> he knew he was coming on. >> i take care of things, you know. >> john, where do you stand now? you correctly forecast where oil was going to go. we're at about $31 a barrel. are we near the end of the cycle or not? >> unfortunately, no. i think the low point now will be $18 a barrel. because that's what it's going to take to get a response from the major oil producers that are part of this family of oil producers in the world. the russians, the saudis, iraqis, iranians, and even our u.s. shale folks are not doing anything to cut back production. what they're doing right now is scrambling to stay alive and try to outlast the other person, if you will. >> i thought u.s. production was coming down. but i guess just not enough. >> tyler, it came down from a high of 9.6 million barrels to 9.2 back in october. and even since then there's been a huge drop in the u.s. rig count, and we've plateaued.

and with us cnbc contributor john kilduff. governor richardson, i understand it's a couple years off and the numbers are fairly small, but shouldn't the government maybe step in here and say, you know what? if prices are going to be higher when we sell a couple years from now, why not buy some oil and, by the way, maybe help an industry that is on its heels right now? >> well, i would be very cautious for the department of energy to go ahead and move forward and try to sell some oil right now. i think that's a bad idea. you use the strategic petroleum reserve in emergencies, when there's a national security emergency, when there's a supply emergency, not when you want to affect prices. now, we used it -- when i was secretary, it was $10 a barrel, and in the year 2000 we triggered the strategic petroleum reserve because there was a shortage of home heating oil in the northeast and the price had gone up to $28. that's a historically perspective. but i think what the congress did at the end of the session, by the way, the oil exp

let's bring in john kilduff. he's a cnbc contributor.t would be a good price where you see this is going. if i read the notes over the weekend, you claim we might get as low as $18. they may need a quote, unquote bailout for the industry. what is that about? >> i'm worried. i'm worried about the energy security future. it's clear to me. why i was saying 18, low 30s last year is we need a shocking number for this industry to finally react on a global basis. everyone is hunkering down. everyone is scrambling to live within their means right now. i'm afraid that the saudis are going to have the deep pockets here and our u.s. oil industry is up against nationally owned oil companies in the world. i'm afraid as what happened in 1988, they get slaughtered, wells get capped ad hoc in a poor fashion and we're put-back in the box where we're entirely energy dependent and over the barrel. >> when you say bailout, yo you are' talking gm style, t.a.r.p. style bailout? how would you or kes straight that? >> i floated some ideas in an op ed on cnbc.co

joining us, john kilduff. you have been expecting the move lower.ere you surprised to see a 7% move lower yesterday and continued selling today? what is driving it? >> well, i thought there might be some wild action yesterday sarah because of the expiration of that february contract. as the futures contract, you know, really trues up with the conditions on the ground at the delivery point, we're massively oversupplied if not almost at capacity there so i was fearful of a price break and i guess for the most part we got it and there's a new wrinkle to this bearish market almost on a daily basis. whether it's ramping up their exports or the worsening conditions in china and what the central bank there may do about it. >> let's talk about iran coming back to the table because clearly we had an extra leg lower this week core lati with having it's sanction lifted. who is going back to iran to buy? is it people across the board or specific buyers? and what does that mean for the dynamics of the oil market? >> they're selling into an already wildly oversup

we just had john kilduff on again from capital. >> he was good. >> he is.r people that we used to talk about all said it would bottom at 80 then 70 then 60 then 50 then 40. i look at them when they come on. they come on other shows. the other shows -- they should look to see -- >> we got it right. >> who is in the ballpark or same sport. find somebody in the same sport. >> possible it could go lower. >> limited group. in the meantime some big news to get to this morning. xerox just announcing moments ago it will split its business into two publicly traded companies one containing its hardaway operation and the other service business. carl icahn will be getting three seats on the board. joining us first on cnbc xerox chairman, ursula burns. we thank you for being with us this morning to help us walk through what this deal means and how it happened. perhaps we should just start with that very question which is what does it mean and how did it happen? >> well, thank you. i'm happy to be here and explain the future for xerox. about early in october my board and