60 dollar oil <p>China slowdown will keep oil at $60: Xie</p> <p>Oil prices will stay at about $60 per barrel as China digests overcapacity and uses less energy for development, economist Andy Xie said.</p>
Oil prices will stay around $60 a barrel for the next five years as China's economy cools down, economist Andy Xie told CNBC on Thursday.
Oil prices had risen so high because of China's boom, the former Morgan Stanley and IMF senior economist said in a "Squawk Box" interview. China is now transitioning from a 15-year super cycle that built up a massive industrial machine, and the economy must cool down to digest overinvestment, which will drag down commodity prices, he said.
"When China goes into normal situation, I think that the oil price will become normal, too, so $60 would be the normal price for the next five years or so," he said.
Xie predicted the oil price plunge to $60 in September as China's energy demand tapered off. He said oil price declines are trailing the slide in coal, but he expects the gap to narrow.
"Coal is down 60 percent, so eventually I expect oil to come down 60 percent, too," he said.