In an oil and gas report sent to Rigzone recently by the Macquarie team, Macquarie strategists, including Vikas Dwivedi, noted that oil’s “Fermi Paradox [is] nearing an end”, adding that “onshore stocks [are] starting to build”.
“We continue to expect a heavily oversupplied market,” the strategists said in the report.
“We estimate a 1Q26 peak supply-demand surplus of over four million barrels per day. Signs of the surplus are showing with continued offshore builds, increasing onshore builds, and extremely strong freight rates,” they added.
“We estimate that approximately one-third of the offshore build is long-haul shipments from the Americas to Asia,” they continued.
In the report, the strategists revealed that they expect onshore builds to accelerate through year-end 2025 and into early 2026, a process which they said “should drive Brent towards the low $50 range, with a possibility of reaching $45 per barrel”.
“Since the end of August, offshore inventories have increased by roughly 250 million barrels and onshore storage up by ~30 million barrels,” the strategists highlighted in the report.
“In the past month, the trend has accelerated with onshore … [plus] offshore stocks building by ~ three million barrels per day. Yet, structure remains backwardated, as AB barrels continued clearing East,” they added.
A separate report sent to Rigzone by the Macquarie team on December 5 showed that Macquarie was projecting that the Brent price will average $68.21 per barrel overall in 2025 and $60.75 per barrel overall in 2026.
According to that report, Macquarie expects the Brent price to average $63.00 per barrel in the fourth quarter of this year, $57.00 per barrel in the first quarter of 2026, $59.00 per barrel in the second quarter, $60.00 per barrel in the third quarter, and $67.00 per barrel in the fourth quarter.
In that report, Macquarie strategists, including Dwivedi, said, “as Q3 came to a close and Q4 has commenced, a hypothesized heavy oil surplus has begun to materialize in crude stocks on land and (primarily) on water”.
“This has come alongside continued supply strength from key non-OPEC areas (U.S. and Brazil) and historically troubled OPEC producers (Libya, Iran),” they added.
“We continue to model a significantly loosening FY25 balance with supply growth of 3.2 million barrels per day compared to a mere 0.8 million barrels per day of demand growth,” they continued.
“Notably, consistent with the large builds in oil on water, global crude loadings appear up ~4.4 million barrels per day year on year from Sep.-Nov., representing a sequential increase of ~2.8 million barrels per day vs. the prior three months,” they said.
The strategists went on to warn in that report that they “remain firmly bearish on crude oil”.
“Our base case is for Brent to visit the low $50s with a reasonable chance of reaching $45 before physical and paper supply-demand adjustments create a floor for prices to recover from,” they added.
“Along this price path, we also expect a contango forward curve as supply exceeds available refining capacity. Our views are built on our extremely long global supply-demand balance estimates which reach over four million barrels per day in 1Q26,” they continued.
The strategists went on to state in that report that, although their surplus estimates appear to be at the high end of forecasts, they are uncharacteristically part of the consensus view in terms of the direction of balances and price outlook.
On its website, the SETI Institute states that the Fermi Paradox “highlights a profound contradiction: if intelligent alien civilizations are common and could expand across the galaxy within just tens of millions of years – an expanse minuscule compared to the galaxy’s age – then ‘where is everybody?’”.
To contact the author, email
