Oil Prices and News

Everyone involved in oil will be squeezed: Pro

Just beginning of reaction to low oil: Pro
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Just beginning of reaction to low oil: Pro

Oil will continue to fall and everybody involved is going to get squeezed, energy pro John Kilduff told CNBC on Tuesday.

That includes the so-called picks and shovels companies that aren't directly involved in oil production.

"It is a total ripple effect. Nobody's immune to this," Kilduff, founding partner of Again Capital and a CNBC contributor, said in an interview with "Closing Bell."

"I don't think we're anywhere near the bottom yet that's why I keep urging folks to hold off from rushing in to bottom fish."

Read More Oil bottom near? Pro says some of worst may be over

That ripple effect was felt Tuesday by Civeo, which plummeted 52 percent after it handed in weak guidance and slashed its workforce. The company builds villages, or "man camps," to house oilfield workers.

Workers walk the grounds a temporary worker housing site outside Williston, N.D.
Matthew Stave | Bloomberg | Getty Images

Some investors have believed that pipeline companies or master limited partnerships wouldn't be vulnerable to low oil prices because crude production continues to be high. However, Kilduff said that's a mistake.

"I know there is this argument out there that oil will still flow through the MLP or the pipeline and they'll get a toll. They're not going to get the same toll for $50 or $40 or $30 oil as they did for $100 oil," he said.

Read MoreCiveo tanks more than 50% on guidance, suspended dividend

Kilduff thinks there will not be any real impact on production in the U.S. until mid- to late-2015. In fact, he said there is another big pipeline reordering that will deliver another 200,000 barrels a day to the Gulf Coast which will threaten Venezuela and Mexico.

"This thing has not been sorted out in any way, shape or form yet. We've only scratched the surface of the reaction to these low prices," he said.

U.S. crude closed 51 cents higher at $54.12 per barrel on Tuesday, after hitting a 5-½-year low earlier in the day, falling to $52.70.

Disclaimer

Reuters contributed to this report.