Oil prices fell early on Tuesday as analysts including Goldman Sachs warned that August's price rally had been overdone, and that a proposed oil production freeze at current near record levels would not help rein in an oversupplied market.

International Brent crude oil futures were trading at $48.98 per barrel at 0032 GMT, down 18 cents from their last close.

US West Texas Intermediate (WTI) crude was down 23 cents at $47.18 per barrel.

Analysts said the falls were a result of an overdone price rally this month which lifted crude by over 20 per cent between the beginning of the month and late last week.

Since then, prices have fallen back by more than 3.5 per cent.

"The narrative of a rapid re-balancing of the oil market has ... met a few stumbling blocks. Some of Q2's disrupted supply returned, Opec's collective output rose, and US shale oil is being spared the dramatic year-on-year declines forecast earlier in the year," French bank BNP Paribas said.

Goldman Sachs said a proposal by members of the Organization of the Petroleum Exporting Countries (Opec) and other producers like Russia to freeze output at current levels "would leave production at record highs" and therefore do little to bring supply and demand back into balance.

Goldman said it expects crude oil prices of between $45 and $50 per barrel "through next summer," but warned that "a sustainable pick-up in disrupted production would lead us to lower our oil price forecast with WTI prices ... to average $45 per barrel." – Reuters