Crude can breach USD 78 to a barrel again. It has touched a level of USD 68.57/bbl in the markets yesterday. The Brent crude is trading at USD 66/bbl at this point in time. A bit of recovery in US markets is helping the crude prices. OPEC has called emergency meeting on October 24, instead of November 18, which is also supportive to the prices.

Here is a verbatim transcript of Manisha Gupta’s on CNBC TV18. Also see the accompanying video

With the kind of fundamentals that we have seen in markets, I think crude can breach USD 78 to a barrel again. We have seen a level of USD 68.57/bbl in the markets yesterday. The Brent crude is trading at USD 66/bbl at this point in time, a bit of recovery that we saw in US equity markets yesterday is what is supporting the prices right now. Organization of the Petroleum Exporting Countries (OPEC) has moved the emergency meeting forward to October 24 from November 18, which is also supportive to the prices.

The inventories rose more than the demand pattern, has continued to decline. But there is an important factor that one of the exports were also mentioning that most new projects have an output cost of USD 75/bbl. Russia is comfortable at USD 70/bbl, most of these Western countries and Saudi Arabia are comfortable at USD 60/bbl.

For a very near-term you might see some support in US economy - decline in prices but then in the longer term they would be scraping off investments, followed by another cycle of shortage and rising prices coming in 2009 or 2010 and that would take prices much higher than what we have seen prices in 2008.

So you really need to see base around the USD 70/bbl, otherwise in the longer term it would be bad. But for the very near-term you might see prices trading between USD 68/bbl on the lower side and USD 75/bbl on the higher side.