See crude at $60 a barrel by next year end: Capital Economics

Crude prices are likely to see some further weakness this year, says Thomas Pugh, Commodities Economist at Capital Economics in an interview to CNBC-TV18. Pugh, however, expects prices to rebound strongly next year. "We see a little bit of further weakness this year in terms of about USD 45 per barrel," he says. He has a forecast of about USD 60 per barrel by end of next year.Below is the verbatim transcript of Thomas Pugh's interview to Manisha Gupta on CNBC-TV18.Q: It is not just the crude as I was mentioning, it is also the refined fuels where the supplies are much on the higher side. So, with the refining number that we see there, do you see that could put some pressure? A: Definitely, that really seems to be the theme in the market at the minute that the crude market is tightening. However, a lot of this is just feeding through into a glut in supply. However, the point still stands that with oil supplies falling and demand still rising quite rapidly in methylene oils as quickly as people may have assumed at beginning of the year but demand is still rising quite rapidly. The rebalancing is more of a matter of when rather than if. Q: What is your sense there because as of now where we stand we really are in middle of nothing? Most big brokers and banks expect that you could see a rebalancing or balancing of demand supply only by mid 2017. So the next one year how would you look at the crude oil prices, this quarter and of course how do you see the year ending for crude oil prices? A: We see a little bit of further weakness this year in terms of about USD 45 per barrel but then we expect prices to rebound quite strongly next year. So we have a forecast of about USD 60 per barrel by the end of next year.