Oil prices surrendered early gains to edge lower on Tuesday after the International Energy Agency (IEA) said that global oil markets won't be as tight as expected this quarter.
Benchmark Brent crude futures traded 0.2 percent lower at $82.37 a barrel, giving up earlier gains. WTI crude futures were down 0.1 percent at $78.17.
Oil prices rose sharply on Monday to extend gains for a third successive session following bullish demand forecasts from OPEC and Goldman Sachs.
The IEA said in its latest monthly report that that it anticipates a supply shortfall during the fourth quarter. But it will be roughly 30 percent smaller than previously projected, at about 900,000 barrels a day.
"World oil demand continues to exceed expectations. Yet "world oil supply growth is also exceeding expectations" as "production growth in the U.S. and Brazil has been outperforming forecasts."
A report from the OPEC said on Monday that demand in the U.S. and China is not lowering to the point of concern.
