By Andrei Skvarsky.
Sun Global Investments chief executive Mihir Kapadia argues that the current decline in the oil price is largely the result of growing shale oil production in the United States and that the US shale industry’s performance may undermine the influence of the Organization of the Petroleum Exporting Countries (OPEC).
“The US shale industry has revived as the number of rigs has grown at a rapid pace ever since the new administration [of President Donald Trump] took office. North American production is threatening the OPEC pact on supply reduction. This is leading to rising US inventories, which is worrying oil bulls as it implies a waning influence of OPEC,” Kapadia told EmergingMarkets.me in an emailed comment.
Kapadia also cited OPEC’s oil market report for March as saying oil stocks have been increasing in industrialised countries in general, not just in the US.
Kapadia is chief executive and founder of Sun Global Investments, a London-based financial services firm with offices in Dubai and Mumbai, which was set up in 2008.