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 Brent crude futures were down 12 cents at $40.72 a barrel at 0922
GMT, hovering above the $40 mark it last traded at three months ago.
On Monday the contract had climbed by 5.5 percent in intra-day
trading and it has gained about 50 percent since Jan. 20.
U.S. West Texas Intermediate (WTI) futures were down 10 cents at
$37.80 a barrel.
"Prices are lower on the Goldman Sachs and Kuwaiti comments and the
oil market remains oversupplied," said Tamas Varga, oil analyst at
PVM in London.
Kuwait's oil minister said on Tuesday that his country's
participation in an output freeze would require all major oil
producers, including Iran, to be on board.
"I'll go full power if there's no agreement. Every barrel I produce
I'll sell," Anas al-Saleh told reporters in Kuwait City.
OPEC member Kuwait is currently producing 3 million barrels of oil
per day, he added.
On Monday the Ecuadorean government said that Latin American oil
producers would meet on Friday to coordinate a strategy to halt the
crude price rout.
Tuesday's report by Goldman Sachs said that a recent surge in
commodity prices was premature and unsustainable.
"While these dynamics (rising prices) could run further, they simply
are not sustainable in the current environment," the analysts wrote.
"Energy needs lower prices to maintain financial stress to finish
the rebalancing process; otherwise, an oil price rally will prove
self-defeating, as it did last spring."
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On the demand side, China's crude imports jumped 19.1 percent
between January and February to 31.80 million tonnes, or about 8
million barrels per day, despite overall weak trading figures
released on Tuesday.
"Higher 'teapot' (independent refinery) demand and stronger refining
margins ... have contributed to increased imports. Falling domestic
crude production is also supportive," said Virendra Chauhan of
Energy Aspects.
Despite strong oil demand, questions about the sustainability of
growing consumption weighed on markets after China's overall exports
tumbled by a quarter in February.
China's February vehicle sales, a key driver for gasoline demand,
were down 3.7 percent year on year, data from the country's
Passenger Car Association showed.
"This is really a poor start for trade this year," said Zhang
Yongjun, senior economist at the China Centre for International
Economic Exchanges.
(Additional reporting by Henning Gloystein in Singapore; Editing by
David Goodman)
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