Goldman Sachs cut its forecast for the price of oil by 14 percent on weaker demand in the final three months of the year.

The investment bank estimates oil will end the year at about $43 a barrel, compared with a prior forecast of $50 a barrel.

"Importantly, given the uncertainty on forward supply-demand balances, we reiterate our view that oil prices need to reflect near-term fundamentals – which are weaker – with a lower emphasis on the more uncertain longer-term fundamentals," the bank’s commodity research team led by Damien Courvalin, said in a note obtained by CNBC.

Oil futures traded in New York fell 2.8 percent to $44.66 a barrel at 10:23 a.m. Tuesday morning on fading prospects of an agreement by producers to tackle a lingering supply glut after Iranian Oil Minister Bijan Zanganeh said country is not ready to agree to an output freeze at Wednesday's meeting, according to Agence French Presse.

Major oil producers including OPEC countries and Russia met at the International Energy Forum in Algeria to discuss markets and the global economy.

Goldman said its forecast assumed a minor increase in production by Libya and Nigeria, and a potential deal among OPEC members might support prices in the short term, but fewer supply disruptions will pressure prices.

“Statements by participants suggest potentially greater collaboration between OPEC members than in previous attempts, although the outcome of this advisory meeting remains uncertain," Goldman said.

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