Edward Morse, managing director and Global Head-Commodities of Citi, in an interview with CNBC-TV18, said that crude demand will climb higher in the second half of the year. He said most of the demand for crude would come in from South Asia, East Asia.

Share Market Live

NSE

Talking about India, he said, "The economic outlook still looks healthy for India, so expect a pickup in demand from there."

The commodities in the week gone by were quite volatile. Crude prices gained, up by about 2.5 percent for Brent, while the US Crude was up by 1 percent. Supply-side pressures seem to be supporting crude oil prices but haven’t been a strong supportive factor.

Most of the industrial metal prices declined. Copper prices are trading at close to two-year lows, while zinc prices are close to three-year lows and iron ore prices have also continued to decline to five-month lows. However, it has been a week of breather for precious metals silver and gold prices after hitting record highs in many currencies for the month of August.

According to him, the crude market has gone relatively short — the relationships between longs and shorts in the market is almost at historical low and that has been putting pressure on crude prices much more than the fundamentals. “For now we think it's US-China trade war and what the US Fed will do in September would be the major driver of this market."

“Look at Brent being in a USD 60/barrel range through the end of the year but that depends on many other things — on September 1, US will be putting more tariffs on imports from China and if China retaliates then it will be negative for all commodities," Morse added.