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The Santos Ltd (ASX: STO) share price had a positive time in May.
During the month, the energy producer's shares rose a decent 3%.
This compares favourably to a 3% decline by the ASX 200 index over the same period.
Why did the Santos share price beat the market in May?
With no news out of the company last month, it appears that optimism over oil prices was a key driver of its gains.
During the month, the WTI crude oil price actually lost a fair bit of value. It started the month at US$75.66 a barrel and ended it 10% lower at US$68.09 a barrel.
However, investors were looking beyond this and focusing on comments by Saudi Arabia's energy minister, Prince Abdulaziz bin Salman. When asked about short sellers targeting oil prices, he said:
Speculators, like in any market, they are here to stay. I keep advising them that they will be ouching — they did ouch in April. I don't have to show my cards. I am not a poker player and I don't know how to play poker, but I got it from a movie somewhere….but I would just tell them, watch out.
True to form, at the weekend, Saudi Arabia announced that it plans to cut production, which sent oil prices hurtling higher.
What else?
In addition, there was a spot of takeover speculation that may have helped the Santos share price last month.
Analysts at E&P Financial have suggested that it could be an attractive takeover option at current levels. They said:
We continue to think the sector is well positioned for consolidation given conservative balance sheets… with large, global operations giving them an ability to execute on global trends. Clearly, Santos could be an M&A target if the stock price doesn't improve versus peers.
Here's hoping that June is just as fruitful for shareholders.
