Latest report from International Energy Agency, warned on recent upticks in oil price as it expects the glut not only to continue but storages across globe to keep filling up. According to IEA, supply demand mismatch for 2016 is greater than it had anticipated. "With the market already awash in oil, it is very hard to see how oil prices can rise significantly". It also said "In these conditions the short term risk to the downside has increased."

So Brent's recent rise from $27/barrel could only be a short term correction, no reversal.

Venezuela recently trying to get both OPEC members like Saudi Arabia and non-OPEC members like Russia to the table and to make a joint arrangement for production cut. However, that has yet to reach any convincing stage to support prices for oil.

IEA's production data also pointing to relentless glut. According to IEA, in January OPEC production rose by 280,000 barrels/day to 32.6 million barrels/day. That means production rose by 1.7 million barrels/day.

Non-OPEC production on the other hand, dropped by 500,000 barrels/day from December but that is about same level compared to a year ago. It is likely to decline further in 2016 by almost 600,000 barrels/day. However that decrease unlikely to change supply demand imbalance from current level as Iran's increased production likely to cover that shortfall.

Demand growth on the other hand likely to slow down to 1.2 million barrels/day in 2016 from 1.6 million barrels/day in 2015.

All in all outlook fundamentally remains bleak.

WTI is currently trading at $30.5/barrel and Brent at $3/barrel premium.