* IEA cuts oil demand growth forecast, follows OPEC's Monday report
* Brent, US crude briefly rise more than $1, then retreat
* Technicals: Brent may rise to $115.22
* Coming Up: API U.S. oil inventory report; 2030 GMT (Changes dateline, updates throughout)
Por Jessica Donati
LONDON, 13 Set (Reuters) - Oil pared early gains after the International Energy Agency (IEA) cut its estimate for demand growth and raised its supply forecast on Tuesday, countering support provided by rebounds in the euro and in stock markets.
The IEA, which advises 28 industrialised countries on policy, said slowing economic growth had led the agency to cut its oil demand growth forecast by 160,000 barrels per day for 2011 and by 190,000 bpd for 2012.
Supply was also seen to rise more rapidly than previously forecast over the next year, with Libyan crude oil production capacity coming back sooner than expected and signs OPEC output was continuing to grow.
"It is possible that we could see an easing in the tightness of the market in the months ahead," said David Fyfe, head of the IEA's oil industry and markets division.
Brent
The IEA's revision followed a similar cut in another closely watched report on Monday by the Organization of the Petroleum Exporting Countries. Disappointing U.S. data was the main worry, but a slowdown in China and India was also a concern.
"Oil demand is weak going forward. If we are going to rely on the global economy, then we have to rely on China, the only economy with decent numbers coming out," said Rob Montefusco, an oil trader at Sucden Financial.
The world's top consumer, the United States, also lowered its projection for growth earlier this month, trimming the figure for demand in 2012 by 250,000 bpd.
OUTSIDE SUPPORT
Stocks steadied and the euro rebounded from a seven-month low against the dollar after a report that Italy may get financial support from China, easing worries about defaults in the euro zone.
"This is a shallow bounce because of Wall Street ending higher, so there is some confidence returning, but I don't think anybody would be putting any big positions given the global situation," said Victor Say, an analyst at Informa Global Markets in Singapore.
"You never know what is going to blow up in Europe next."
But an expected drop in U.S. crude inventories was also supporting markets, with analysts estimating a 3 million barrel draw last week after Tropical Storm Lee disrupted oil production in the Gulf of Mexico, a Reuters poll showed.
Industry group the American Petroleum Institute will release its weekly report on Tuesday at 2030 GMT, followed by government figures from the Energy Information Administration on Wednesday.
In other news, executives at Reuters Russia Investment summit said Russian oil exports would jump and production rise as a result of changes to energy taxes designed to help the world's largest oil producer keep its lead over OPEC heavyweight Saudi Arabia. (Additional reporting by Alejandro Barbarosa; Editing by Jane Baird)