Oil prices dropped on Tuesday following reports of rise in crude production by oil exporter Saudi Arabia which pumped 10.308 million barrels of oil a day in the month of April.
Brent crude fell 20 cents to $64.71 a barrel, while West Texas Intermediate (WTI) dropped 8 cents to $59.17 a barrel, Reuters reported.
A warning from the US-based Goldman Sachs that the recent price rise helped in the reduction of oversupply also led to the fall in prices.
“While low prices precipitated the market rebalancing, we view the recent rally as premature with crude oil prices expensive relative to current and forecast fundamentals.”
The investment bank said “While low prices precipitated the market rebalancing, we view the recent rally as premature with crude oil prices expensive relative to current and forecast fundamentals.”
The bank added that prices need to weaken gradually if any rebalancing of oil prices is to happen, saying that the recent rally in prices is premature.
The fall in oil price was also a response to ongoing debt trouble in the Eurozone, and a result of a rise in the value of the dollar.
On Monday, the International Monetary Fund received around €750m ($836.7m) from Greece, which could not stop concerns over future payments.
The bailout plan for Greece has been extended for a period of four months, which is set to expire in June.