Get ready for another oil price dip: Goldman Sachs

The rally in oil over the last couple of months has derailed a rebalancing of the commodity's price and will cause it to weaken, Goldman Sachs warned Tuesday.

"We believe that the recent price rally is premature"

The price of oil collapsed from near-$120 a barrel in June last year to lows of around $45 a barrel in January, although it has since bounced back to around the $60-a-barrel level. Analysts are now contemplating oil's "new equilibrium," with a slew of market watchers predicting that prices could climb to around $70 before the end of the year.

However, Goldman Sachs said the price may have gotten ahead of itself and warned that oil was now trading at a premium compared to to its own "still weak fundamentals." These weak fundamentals include rising stockpiles of oil, it explained, and production growth is expected next year from low-cost producers such as Saudi Arabia, Iraq and Russia.

The dramatic fall in the price of oil has been due to weak demand, a strong dollar and booming U.S. oil production, according to the International Energy Agency (IEA). OPEC's reluctance to cut its output has also been seen as a key reason behind the fall.

On Tuesday morning, Goldman Sachs also downgraded its 2016 production forecast and now expects non-OPEC countries (excluding the U.S.) to see a decline by 200 killobarrels of oil per day versus a previous estimate of it growing by 190 killobarrels.