Oil has now comfortably settled above $80, with Saudi Arabia refusing to alter its strategy and U.S. shale companies maintaining their spending discipline.
Energy stocks are bouncing back into the limelight, significantly outperforming the broader S&P 500 index. Oil prices have remained largely stagnant over the week, with Brent trending around the $85 per barrel mark and WTI narrowing its Brent differential at $83 per barrel. Whilst both coal and gas prices have fallen back this week from earlier peaks, that decline was not enough to balance tight supply. Moreover, oil found marginal support from a surprise US crude stock draw as EIA data contradicted a solid weekly gain forecast by the API. Despite the steep backwardation in crude futures, oil prices are unlikely to change significantly until there is a fundamental shift in the ongoing energy crunch.
Saudi Arabia Refuses to Change Crude Strategy
Saudi Energy Minister Prince Abdulaziz bin Salman dismissed calls for a change in OPEC+ production strategy amidst increasing pressure to bring down outright prices, claiming the current energy crunch is not due to there being a shortage of crude.
