Oil is poised to slump to $45 a barrel by October as a surplus of crude and producers’ easy access to cash weigh on the market, according to Goldman Sachs Group Inc.

A recovery in prices to near $60 a barrel from a six-year low in March is premature, analysts including Jeffrey Currie said in an e-mailed report dated May 18. The availability of cheap capital exacerbates the need for sustained low prices to keep U.S. producers from boosting output, according to the bank.

West Texas Intermediate oil has rebounded 37 percent since March amid speculation a drop in U.S. drilling rigs to the fewest since August 2010 will slow output and ease a supply glut. The backlog of drilled but uncompleted wells represents more than 100 million barrels of crude held in underground storage, Goldman said.

“Our bearish view has been driven by two surpluses: excess hydrocarbons, but just as importantly, excess capital,” New York-based Currie and Damien Courvalin said in the note. “We find that the global market imbalances are in fact not solved and believe that the rally will prove self-defeating as it undermines the nascent rebalancing.”

While markets have focused on the U.S. rig count, given its weekly frequency and potential insight into slowing shale output, production will still grow in 2016 at the current number of active machines, according to Goldman. Uncompleted wells can be brought into production quickly and add at least 250,000 barrels a day, according to the bank.

“Should WTI remain near $60/bbl, U.S. producers will ramp up activity given improved returns with costs down by at least 20 percent,” Goldman said in the note.

Price Recovery

Oil prices collapsed almost 50 percent in 2014 as a shale boom drove U.S. production to the fastest pace in more than three decades. The nation’s crude stockpiles are near the highest level since 1930, according to monthly data from the Energy Information Administration dating back to 1920.

The slump led to U.S. companies reducing the number of active rigs by 58 percent since December, the most prolonged retreat from the nation’s fields on record. The count dropped to 660 through May 15, according to data from Baker Hughes Inc.

Prices will recover gradually through to the end of next year and reach $60 a barrel, which Goldman estimates as the marginal cost of production for shale. The bank’s 12-month forecast is $55 a barrel, which implies $53 in the first quarter of 2016, it said in the note.

Goldman forecast WTI to trade this year at a $6 discount to Brent in London, the European benchmark crude, and $5 from 2016. Brent for July settlement was 1.3 percent lower at $65.42 a barrel on the ICE Futures Europe exchange at 3:52 p.m. Singapore time.