Crude Oil supply growth is accelerating while demand due to cold weatehr and China imports have weakened which poses downside risk to oil prices.Barclays said in a report that downside risks are high due ot heavy fund length, but dips shoud be seen as a buying opportunity.China's crude oil imports have fallen back from all-time highs and evidence has started to mount of a robut recovery in oil supply.

Compared to fall in output among Organisation of Petroleum Exporting Countries (OPEC) in 2013, production has started ijprving again in February . Last year short fall in Libya, Iraq, Nigeria and other OPEC nations had caused upto 3 mn barrels per day Oil short fall.

Downside risk to Oil prices
There appears a possibility of oi prices decline upto $10-15 per barrel and WTI Crude could be more hit that Brent. Global crude oil demand may get pushed down in 2014.

Short term demand prospects looks sluggish on China slowdwon and the prospect of a pull-back in US demand growth after an exceptional expansion through late last year and early 2014 that was partly due to unusually cold weather.

Market update:
Brent Crude oil is trading lower at $106.99 per barrel compared to previous close at $107.02 and charts are indicative of a strong sell on an intra-day basis while WTI Crude appears more positive at $99.26 as against previous close of $99.46 per barrel but still bearish, analysts added.
Source: Barclays