In an oil and gas report sent to Rigzone by the Macquarie team this week, Macquarie strategists, including Vikas Dwivedi, said “sentiment at APPEC was mostly bearish crude”.
“Most participants are looking for large surpluses in 4Q25 and 1Q26,” the strategists said in the report.
“Similarly, we forecast … [around] three million barrels per day of surpluses for 4Q and 1Q,” they added, noting that “key NOPEC supply growth areas include Brazil, U.S., and Guyana”.
The strategists stated in the report that “the return of OPEC barrels and more consistent production from traditionally riskier suppliers including Libya and Nigeria have also contributed to large, surplus balances”.
They went on to note in the report that “one bullish push-back during APPEC was Chinese SPR [Strategic Petroleum Reserve] buying continuing to support crude”.
“For this year, over 75 percent of the onshore crude build has occurred in China which has underpinned physical market strength and associated indicators including cargo structure and grade differentials,” the strategists highlighted.
They went on to state in the report, however, that, in their view, “balances will remain heavily oversupplied even if Chinese SPR purchases return closer to 2Q25 levels”.
Softening of North Sea Cargo Markets
The Macquarie strategists highlighted in the report that, during APPEC, they discussed the “softening of North Sea cargo markets”, which they pointed out “has added to bearish expectations”.
“In the North Sea, traders have noted an overhang of supply for end of September and early October cargoes,” they said.
“Notably, the Brent DFL has tinkered in and out of negative territory over the past few weeks indicating a softening physical market. Similarly, Brent CFD backwardation has decreased providing additional evidence of a looser market,” they added.
“Furthermore, key grade differentials have fallen with both Johan Sverdrup and Forties weakening relative to Dated Brent,” they continued.
Overwhelmingly Bearish
In a note sent to Rigzone by the Sparta Commodities team on September 11, Neil Crosby, Oil Analytics AVP at Sparta, said APPEC messaging was “overwhelmingly bearish”.
“Flat price seems to have been mean reverting around the high sixties all year and so it proved this week,” Crosby stated in that note.
“It is probably still very difficult to be short flat price when practically every other day brings a fresh headline in geopolitics, sanctions, war,” he added.
“Talk at APPEC was nevertheless overwhelmingly bearish on long forward oil balances in Q4 and beyond,” he continued.
“We don’t need to argue the merits of the forecasts but at least can point to the fact that even now there isn’t a clear and consistent picture in pricing and fundamentals to suggest we are in that glut yet,” Crosby went on to state, noting that “some areas look weakish, others show tightness”.
In this note, Crosby said “it is fair to say that (Western) crude appears to be weaker than products” and highlighted that “Brent spreads halved from 66c to 33c since the start of the month”.
APPEC 2025
APPEC 2025 was hosted by S&P Global Commodity Insights and took place from September 8-11 at Raffles City Convention Centre L4 in Singapore.
S&P’s website described APPEC as “the most anticipated event in the energy industry” and highlighted that APPEC 2025 would “address the critical themes influencing the energy [sector]”. These included “geopolitical influences on global energy markets”, “redefined decarbonization strategies”, “market trends and pricing outlooks”, “[the] evolution of carbon markets”, “technological innovations and disruptions”, and “navigating investment challenges”, the site pointed out.
Dwivedi describes himself as a global oil and gas strategist at Macquarie Group on his social media, which shows that he is based in Houston, Texas. Macquarie Group describes itself on its website as a global financial services group “operating in asset management, retail and business banking, wealth management, as well as advisory, and risk and capital solutions across debt, equity, financial markets and commodities”.
The note sent to Rigzone by the Sparta Commodities team described Crosby as an experienced energy market and commodity analyst, specializing in crude oil, oil products, biofuels, and carbon.
“With roles at OilX and JBC Energy, he has extensive expertise in global oil industry analysis, forecasting tools, bespoke research, and client communication,” the note added.
Sparta states on its website that it “delivers accurate, real-time and reliable market intelligence to ignite opportunities and enable you to seize tomorrow’s trading opportunities, today”.
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