Weak demand and worries over the worsening global oil surplus pressured prices over the prior trading week, with both WTI and Brent hitting their fresh multi-year lows. A global crude glut and slowing demand are major reasons for the slide in oil, which has lost some 70% since mid-2014 when the downward move started.

In addition, concerns over China's slowing economy is adding to the overall negative picture as the country is a key consumer of the commodity and any economic weakness could mean slowing demand. According to Reuters' calculations, implied Chinese oil demand climbed by 2.5% last year to reach a record 10.32 million barrels per day. 

Meanwhile, Iran is another threat to oil prices as economic sanctions against the country was lifted, meaning Tehran can fully enter the market. As expected, Iran has announced its intention of stepping up its oil production by 500,000 barrels per day, which will further increase the oversupply in the short term.

Recently OPEC slashed the non-OPEC crude supply outlook and on the contrary, upwardly revised the global oil demand forecast. In 2016, non-OPEC oil supply is now projected to contract by 0.66 million bpd year-on-years to average 56.21 million bpd.

In its latest monthly report, the International Energy Agency predicted even bigger fall for oil prices this year as the global oversupply is not going to ease any significantly.