Expectations that a weekly government report later on Wednesday would show a further rise in US crude stocks, already near six-year highs, also weighed on prices.

US crude prices shed 60 cents to $51.47 a barrel, while London's Brent crude oil eased 50 cents to $50.93 a barrel.

Prices fell as the International Energy Agency's monthly Oil Market Report said incremental demand in China, Europe and the United States was less than expected for the quarter.

China's demand, an explosive 19.3 percent in the first quarter last year, slowed to 4.5 percent in the same period of 2005.

The slowdown in growth means the outlook for fourth quarter world demand does not appear as likely to stretch producer countries as in the same period last year, the IEA said.