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OPEC creating price war: Oil trader

OPEC price war

Oil prices are plummeting, and OPEC is not cutting production to keep prices up.

To oil trader Anthony Grisanti, that means the organization is creating a price war not only with the United States and Canada, but within OPEC.

"There are certainly some member nations that have lower production costs themselves that are going to say 'hey if Saudi Arabia is taking an every man for himself attitude, we are too. We are going to produce as much as we can,'" Grisanti, founder and president of GRZ Energy, said in an interview with CNBC's "Power Lunch. "

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Essam Al-Sudani | Reuters

That means prices may continue to fall. At this point, $60 per barrel seems to be the base price for U.S. shale oil, he added.

On Tuesday, U.S. crude fell $1 or 1.2 percent to $81.96 a barrel after hitting a low of $80.01 early in the trading session.

Brent crude for November delivery, which expires on Thursday, fell $1.03, to $84.01 a barrel by 1:45 p.m. EDT, after trading earlier as low as $83.37 a barrel, its weakest since 2010. It fell nearly $4 on Tuesday, the biggest drop in three years.

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Jeff Kilburg, founder and CEO of KKM Financial, told "Street Signs " he thinks oil's slide will continue, and said it won't be long before U.S. crude hits $75 a barrel.

"The 70s are momentarily away. As we see the stock market selling off, crude is definitely going to go down with it."

Lincoln Ellis, managing director at Westwood Capital told "Power Lunch" the larger issue is deflation.

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To him, it's about "this global production issue, and whether or not we actually have the consumer demand that is going to pull through interest in people rebuilding stocks and gaining supply and pulling demand back into the energy market."

—Reuters contributed to this report.