LONDON: Oil prices edged lower on Tuesday in volatile trading after Kuwait said it would agree to an output freeze only if all major producers took part and Goldman Sachs analysts poured cold water on prospects for a sustained rally.

Brent crude futures were trading at $40.24 a barrel at 1442 GMT, down 60 cents on the day. Earlier in the session, the contract had climbed to a three-month high of $41.48, gaining more than 50 percent since its 2016 low on Jan. 20.

US West Texas Intermediate (WTI) futures were down 75 cents at $37.15 a barrel.

“The market has run a little bit too far too fast,” said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

“Expectations regarding production cuts are high, and so is the positioning of most traders and hedge funds. The potential for a surprise seems to be on the downside now.”

OPEC members and other producers in Russia are due to meet for talks on propping up prices on March 20, according to the Nigerian petroleum minister.

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 said in Kuwait City.

OPEC member Kuwait is currently producing 3 million barrels of oil per day (bpd), he added.

Analysts at Goldman Sachs said in a report that the recent price rally 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.”

SEB chief commodities analyst Bjarne Schieldrop agreed, saying that US shale oil rig numbers could soon rise again, halting the recent price rise.