Oil prices tumbled more than one percent on Wednesday in ASia, extending the previous day's sharp falls after the International Energy Agency warned of weakening demand.

A recent rally had sent the commodity to two-year highs, fuelled by hopes producers will extend output cuts well into 2018 as well as escalating tensions between crude giants Saudi Arabia and Iran.

But the Paris-based IAE said in a monthly report that it had revised down its forecasts for this year and next, adding that markets are expected to be oversupplied in the current quarter and going into 2018.

The announcement sent US benchmark West Texas Intermediate (WTI) diving 1.9 percent Tuesday while Brent shed 1.5 percent.