Oil prices wavered in and out of the red today, as investors weighed mixed messages from the market.
Brent crude, the global benchmark, fell 2.2 per cent to $39.94 per barrel in afternoon trading. Meanwhile, West Texas Intermediate crude, the US benchmark, slumped 2.7 per cent to $36.88
They'd inched into positive territory earlier, with analysts telling Reuters that this was due to bullish sentiment and the absence of negative news.
Yesterday, both benchmarks hit fresh highs on hopes the 20-month price rout was coming to an end.
But oil prices started the day on the back foot after analysts at Goldman Sachs warned the recent commodities rally is premature and unsustainable.
"While these dynamics (rising prices) could run further, they simply are not sustainable in the current environment," they wrote in a research note.
"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."
Kuwait’s oil minister, Anas al-Saleh, also weighed on optimism over other Opec members being roped into the historic production freeze deal between Saudi Arabia and Russia.
"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 countries are attending second round talks in Russia on 20 March, including Nigeria and the United Arab Emirates. However, Iran has said it is determined to boost oil output following the removal of economic sanctions earlier this year.
Separately, a Bloomberg survey showed analysts expect official data due tomorrow to show US stockpiles of oil rose again last week, adding to the surplus.