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Oppenheimer & Co. Managing Director Fadel Gheit argues oil prices should be lower then they are.
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All well oil prices rising double digits since June and we have an analyst who says.
Buying oil isn't the only way to get in on the gains bottle gates is the managing director and senior analyst at Oppenheimer and company joins us now bottle thanks for joining us.
-- who so.
What's -- story here you think that we're not seeing it.
Oil prices today reflecting the fundamental situation.
No what I'm saying is oil prices ought innovate could.
-- feel potential supply disruption.
And market fundamentals do not support those prices at my -- -- -- that BP I which allowed benchmark price.
Or at a 112 dollar hundred since two dollar for brand.
It should be significant in the water.
Move my -- man continued to decline.
Production continued to increase because of technology because of all don't want children because will be sentenced.
And we have not seen before impact of that if turns all of the gulf of -- school.
Output so all and all -- oil prices are high by about ten to fifteen dolphins are.
So you have you have demand going down you have supply going up because of shale oil and all the other -- neurology and everything.
And and the prices going in exactly the wrong direction given that supply demand scenario so what's happening here follows -- speculation.
Well.
-- speculation has become part of video being overpriced and -- the government has done nothing to stop that.
And we are seeing a bubble.
I'm bubble -- -- was -- the question is not if it's when I'm by how much.
As small like the bubble that we had in 2000 did but nevertheless that's a bubble anything above supplies.
I didn't I'm -- in my view is a bubble.
-- I mean.
Everybody has what you're watching on this network for five years knows my stance on.
Your mention of speculators in their driving of the oil prices what is not to believe that the CFTC -- never been able to prove that.
However if you look at the -- -- situation of the market what speculators are betting on higher prices in the future.
They're looking at the geopolitical situation and -- at risk isn't in the -- leads straight now.
And embracing that in which in my speculation -- the value of valuable function in the market hasn't happen.
I mean if like you see -- -- and beware of dog read them we'll dogs around.
So I mean people can't believe what they -- they want to believe the fact of the matter if they Iranians still may have comes Susan Lewis and hopefully peaceful one hopefully they would -- and went around links oil prices would send.
But that's why they are high today so.
It's unreasonable free to tell viewers that oil prices are unreasonably high Euro is saying right now that they are high because their pricing in -- that rest.
Because -- if you remove distressed which nobody can quantify we do not know.
What impact any military action against generate -- period -- facility.
William -- if put create a ten dollar off in oil price does.
But soon after all -- throughout -- come down to -- is supported by supply demand fundamentals.
We could have -- -- 150 dollars oil but is not going to get our economy moving -- economy on the for us to.
Give the economy back on its feet less hassle have to come down the question again in my view is by how marsh has filed obviously a ten dollar -- won't.
We can't let you go without talking some some some basics here about stocks in particular what oil companies are well positioned to.
To -- -- even if oil does come down to 75 dollars a barrel which which oil companies could withstand that is still do well.
Well the -- orient home for -- You win the -- have less volatility if you realm so if oil prices come down you want to go to those companies.
That were -- that have been some Balanchine we're looking at Chevron -- -- thought it Murphy Brown out as great.
These are very different -- that -- -- hiding never sort of prices did some of the -- that will benefit or prices remain high school or high.
But companies that could benefit strong decline -- lower prices relative to their fear it would be a company like Exxon would become a moment -- Would -- a dollar but not as much as the energy sector in general.
All right thought okay by the way follow I think I'm gonna pay for drinks for you would -- because.
So that I could be there and listen to a continuation of this this argument if you will -- Under question is speculation follows great to see again and prudent and constructive comments destruction conversation constructive -- thank you Bob thanks -- appreciated.
