As of 16:02 GMT, West Texas Intermediate crude oil futures were 1% lower at $55.17 a barrel on the ICE.
West Texas Intermediate crude have both shed about $3 a barrel, or almost 5 percent, from more than two-year highs struck last week.
While the crude build of 1.9 million barrels reported by the Energy Information Administration was more than forecast, it was not as big as the increase of 6.5 million barrels reported on Tuesday by industry group the American Petroleum Institute.
The International Energy Agency (IEA) on Tuesday cut its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018.More news: Five Dead In California Shooting Spree That Ended At School
In 2025, global oil demand is expected to increase by 7 percent and reach 100.3 million barrels per day, which is 2.1 barrels more than forecast a year ago.
"The oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2Q18", the agency said.
OPEC and some non-OPEC producers including Russian Federation have been withholding production this year to end years of oversupply.
Secondly, a reduction in the cost outlook for a variety of upstream projects is behind the changes, meaning that more oil can be brought to the market at lower prices than in the past, the report said.
The largest disruptive force to supply will be shale production in the USA - the IEA estimates U.S. crude oil will reach peak output in the 2020s of around 17m bpd.More news: Mattel's hijab-wearing Barbie replica of Olympian Ibtihaj Muhammad has arrived
The IEA also today released its latest World Energy Outlook, in which it said global oil demand will fall modestly due to the rise in electric cars.
The IEA said non-OPEC production would rise 1.4 million bpd in 2018, undermining efforts by the Organization of the Petroleum Exporting Countries and other producers to limit global crude supplies and support prices. The deal expires in March 2018 but OPEC will meet on November 30 to discuss policy, and it is expected to agree an extension of the cuts.
"The United States is set to become the undisputed global oil and gas leader; renewable are being deployed rapidly thanks to falling costs; the share of electricity in the energy mix is growing; and China's new economic strategy takes it on a cleaner growth mode, with implications for global energy markets", said the report.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.5 million barrels, EIA said.More news: Apple to launch three iPhone X-inspired models in 2018, report claims