Brent May crude had dropped almost half a dollar to $57.65 a barrel in early trading. US May crude was down 39 cents at $51.76.
The fall came after prices jumped more than 5% on Monday as traders reassessed how quickly Iran might increase exports after a preliminary nuclear deal and anticipated that a months-long rise in US crude inventories may be slowing.
Goldman said in an overnight note that it saw little upside for its $40 a barrel forecast over the next three months.
“Prices need to remain low in coming months to achieve a sufficient and sustainable slowdown in US production growth,” the bank said.
“The outlook for US production in 2016 in turn leaves risk to our $65 per barrel forecast as skewed to the downside.”
Goldman said that it expected US crude stocks to peak in April but that inventories would likely rise again by October, putting downward pressure on prices into 2016.
The bank said US output would grow by 700,000 barrels per day year-on-year in 2015, with sequential quarter-on-quarter growth of 170,000 barrels per day in the fourth quarter of 2015, at the current rig count.