This study explored the relationship between perceived sound image size and speech intelligibility for sound sources reproduced over loudspeakers. Sources with varying degrees of spatial energy spread were generated using ambisonics processing. Young normal-hearing listeners estimated sound image size as well as performed two spatial release from masking (SRM) tasks with two symmetrically arranged interfering talkers. Either the target-to-masker ratio or the separation angle was varied adaptively. Results showed that the sound image size did not change systematically with the energy spread. However, a larger energy spread did result in a decreased SRM. Furthermore, the listeners needed a greater angular separation angle between the target and the interfering sources for sources with a larger energy spread. Further analysis revealed that the method employed to vary the energy spread did not lead to systematic changes in the interaural cross correlations. Future experiments with competing talkers using ambisonics or similar methods may consider the resulting energy spread in relation to the minimum separation angle between sound sources in order to avoid degradations in speech intelligibility.