The Santos Ltd (ASX: STO) share price isn't joining the broader market rally today.
In afternoon trading, the S&P/ASX 200 Index (ASX: XJO) is up 1.24% while Santos shares are down 1.59% to $7.45 apiece.
But it's not just the Santos share price that's lagging the benchmark today.
With other big name energy stocks also in the red, the S&P/ASX 200 Energy Index (ASX: XEJ) is down 1.06%.
What's happening in the oil markets?
International benchmark Brent crude oil is currently trading for US$91.95 per barrel.
That's up 0.3% overnight. But it's down 2.8% since Friday.
Analysts are divided over the outlook for crude prices. And that uncertainty looks to be pressuring the Santos share price and other ASX 200 oil stocks today.
The twin forces pit a rather tight global crude supply outlook against the potential of falling demand, should some of the world's biggest economies slip into recession.
Commenting on the oil markets, head of commodities strategy at ING Groep Warren Patterson said (quoted by Bloomberg):
The market is in somewhat of a limbo at the moment with a negative macro backdrop and a tighter supply outlook. At the moment, I suspect the market is more worried about what implications a slowdown will have on demand.
Atop the concerns that reduced demand will bring down oil prices, investors are also keeping an eye on US president Joe Biden.
Why?
Because Biden controls the taps on the US Strategic Petroleum Reserve (SPR).
The US government had previously announced it would tap into 180 million barrels of oil from the SPR. Much of that oil has already been released into the markets.
Now, investors are eyeing the possibility that the Biden administration, irked by the latest production cuts from OPEC+, may release another 100 million barrels. That would likely send crude prices lower and further pressure the Santos share price.
According to founding partner and chief oil analyst at Energy Aspects Amrita Sen (quoted by Markets Insider), "They are also weighing an emergency release of potentially as much as 100 million barrels [from the SPR]. You just don't know given the volume of uncertainty."
Santos share price snapshot
Despite underperforming today, the Santos share price has handily beaten the benchmark in 2022, up 13%. That compares to the 11% year-to-date loss posted by the ASX 200.
