Watch the interview of Fadel Gheit, MD & Senior Analyst, Oppenheimer & Co with Manisha Gupta on CNBC-TV18, in which he shared his reading and outlook on crude.
Crude oil has made a sizable comeback in the past 3 months, but large integrated names like Exxon Mobil and Chevron remain stuck in rut.
US oil prices are heading into a sweet spot that could spur the fracking industry to crank up some of the drilling it shut down when crude prices collapsed.
Between 2010-2013, slowing growth, high twin deficits and lower savings dented the economic cycle, which got more vicious due to rising global oil and gold prices.
In an interview to CNBC-TV18, Gheit says crude oil prices cannot be trading much above their replacement cost. They have been inflated for quite some time, because the risk premium due to fear of potential supply disruption has increased.