A top analyst said oil may trade in the $25 to $45 range.
"We maintain our view of a trendless market with lots of volatility," Jeff Currie, global head of commodities research at Goldman Sachs, told CNBC on Tuesday. He said that before the oil market bounces back, corporate balance sheets have to experience more pressure amid the oversupply.
"Got to keep pressure on the system, keep capex out of the market, reduce production, keep it below demand — which we are still far away from, the data still shows a surplus; inventory is building — then we start to get the green light to want to get positive," he said on "Power Lunch."
U.S. crude settled up at $35.89 a barrel on Tuesday, after earlier dropping to $35.24, its lowest since March 4. The internationally traded Brent also settled up at $38.04 a barrel after touching one-month lows of $37.27 in intraday trading.
Meanwhile, Currie forecasts that toward the third quarter a drop in capital expenditures will trickle through and reduce U.S. oil production meaningfully. Still, the risk of containment may push oil prices to the $20s again.
"Somewhere in July/August — deep third quarter," he said, adding that the change will mean a six-month lag from when drilling and capex come off, citing that the U.S. rig count declined by eight last week. "By the time that we get into the late third quarter/fourth quarter we should see it back."
In other commodities news, Currie recommends that investors short gold.
"Market is pricing in one rate hike, Fed has signaled two, data is signaling three," he said. "You put that together the market needs to trade interest rates higher; what do higher interest rates typically do to gold? Send it down."
— Reuters contributed to this story.