At 2:24 pm (0624 GMT) New York's main oil futures contract, light sweet crude for delivery in March, was 12 cents lower at 58.94 dollars a barrel from 59.06 dollars in late US trades Tuesday.

Brent crude for April delivery was 28 cents lower at 58.55 dollars.

Mark Pervan, senior resources analyst with Daiwa Securities in Melbourne, said the price fall stemmed from profit-taking in a market that remained well-supported.

He said the market continued to closely watch cold weather in the northeastern United States.

"I think that's probably the major driver," Pervan said. "You're not going to see prices falling too far" until the onset of warmer spring weather.

Prices gained on Tuesday after the Paris-based International Energy Agency said oil consumption had dropped in industrialized countries for the first time in two decades but was rising strongly in emerging economies.

In its monthly oil market report the agency, which represents the interests of consumer countries, raised its forecast for global oil demand this year by 273,000 barrels per day (bpd) to 86 million bpd, citing a major revision to estimates of China's needs.

Dealers were also looking ahead to the weekly update later Wednesday from the US Department of Energy on the country's energy stockpiles.