Investing.com -- Oil prices fell Wednesday, overturning earlier gains after the IEA cut its forecast for demand growth this year.
At 11:00 ET (15:00 GMT), Brent oil futures fell 0.4% to $82.70 a barrel, while West Texas Intermediate crude futures dropped 0.4% to $77.97 a barrel.
IEA cuts 2024 growth forecast
The International Energy Agency cut its forecast for 2024 oil demand growth earlier Wednesday, citing weak demand in developed OECD nations, in particular in Europe.
The Paris-based organization, in its monthly report, lowered its growth outlook for this year by 140,000 barrels per day to 1.1 million bpd, and marginally lifted its 2025 oil growth forecast to 1.2 million bpd.
The IEA said its lower 2024 oil demand forecast was linked to weak economic growth, particularly in Europe, where a declining share of diesel cars was already undercutting consumption.
"Combined with weak diesel deliveries in the United States at the start of the year, this was enough to tip OECD oil demand in the first quarter back into contraction," the IEA said.
Inflation jitters in play after CPI data
Oil markets were also on edge after U.S. CPI data showed that inflation remained above the Federal Reserve's target, even though there were signs of cooling.
Traders remain wary of any signs of sticky U.S. inflation, which are likely to push the Fed into keeping interest rates high for longer- a scenario that bodes poorly for crude.
High rates are expected to stall global economic activity and potentially dent demand for oil.
US inventories shrink more than expected - API
Crude markets had traded positively earlier in the session after data from the American Petroleum Institute (API) showed that U.S. oil inventories shrank 3.1 million barrels in the week to May 10, more than expectations for a draw of 1.1 million barrels.
The data also showed a decline in gasoline stockpiles, while distillates rose by 349,000 barrels.
The reading spurred some hopes that U.S. fuel demand was picking up with the advent of the travel-heavy summer season - a trend that could help tighten global crude supplies, even as U.S. production remains at record highs.
Shrinking U.S. inventories and potential supply disruptions in Canada also present a tighter outlook for North American crude markets.
The API data usually heralds a similar reading from official inventory data, which is due later Wednesday.
(Ambar Warrick contributed to this article.)