• By
• Alexis Flynn

Here’s your morning jolt of news, insight and analysis on the global energy business. Send us tips, suggestions and complaints: alexis.flynn@wsj.com

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A HOUSE DIVIDED?

Sometimes silence can be deafening.

In a month where oil prices have plunged below $90 a barrel, perhaps the most glaring surprise of all has been the lack of a Saudi Arabian response.

Never mind a sudden production cut, Riyadh has barely offered an opinion on a topic with major fiscal implications for the Middle Eastern nation.

Significantly, Saudi Arabia’s de facto spokesman, the normally talkative oil minister Ali al-Naimi, has been keeping an unusually low profile.

As The Wall Street Journal’s Summer Said, Benoît Faucon and Sarah Kent report, Mr. al-Naimi’s absence is a symptom of the unusually high level of dissent within the secretive kingdom that has left it uncertain over how to respond to oil’s downturn.

According to the WSJ report, some in Saudi Arabia’s top ranks think the 25% slide in prices since June is a revenue decline it can’t afford. Others believe guarding market share is more important and that cutting production now risks putting the country in a position that will be difficult to escape further down the line.

Some analysts say that Saudi Arabia is bowing to the reality that U.S. shale oil production is now the most important factor in global oil markets.

“Cutting production would accommodate the further expansion of U.S. shale, as well as reduce Saudi profits,” Goldman Sachs analysts said in a note earlier this week. “OPEC will no longer act as the first-mover swing producer…U.S. shale oil output will be called upon to fill this role.”

UKRAINE GAS DEAL REACHED

Intense negotiations between Russia and Ukraine concluded Thursday as the two countries resolved their dispute over natural gas fuel. The deal averts the threat of gas shortages in Europe this winter and officials say it may portend a broader thaw in relations between Moscow and Kiev after months of tensions amid civil strife in Ukraine’s restive eastern regions.

As the Journal’s Vanessa Mock and Laurence Norman report, the deal was sealed following talks brokered by the European Union, which relies on Russia for more than a third of its gas imports, half of which is piped through Ukraine. Unless Ukraine paid for its gas supplies upfront, Russia had said it wouldn’t reopen taps it shut off in June, a move that threatened to leave many homes in Ukraine and parts of Europe without enough heat this winter.

MAJOR PAIN

Big oil—companies like BP, Royal Dutch Shell and Total—often make a point of playing down their sensitivity to the oil price. The refrain usually goes along to (un)popular tunes like “We Invest Through the Cycle” or “Our Portfolios are Big and Diverse.” As Heard on The Street writer Helen Thomas explains, they may have a point; only about one-third of oil’s tumble to $85 a barrel from over $110 in June was reflected in the European majors’ third-quarter results.

MARKETS

Oil futures traded lower in London on Friday after hovering in a narrow price band in Asian hours earlier in the day. Crude had settled lower overnight, snapping a two-day winning streak, with Nymex West Texas Intermediate down around 18% year-to-date and Brent crude down around 23% year-to-date, which analysts said was due in part to the strength in the dollar and continued oversupply concerns. Read our latest market report here.