RIYADH: Oil prices slipped on Monday, easing off five-week highs, as the market took profits following strong gains last week on expectations of tighter supplies following cuts by the Organization of Petroleum Exporting Countries and its allies, together known as OPEC+, and ahead of the EU embargo on Russian oil.
Brent crude futures fell 94 cents, or 0.96 percent, to $96.98 a barrel by 07.50 a.m Saudi time, while the US West Texas Intermediate crude was at $91.78 a barrel, down 86 cents, or 0.93 percent.
Both contracts touched their highest since Aug. 30 earlier in the session but gave up gains, slipping along with stocks in Asia amid thin trade with Japan and South Korea closed for public holidays.
Saudi Aramco to keep full oil supplies to North Asia despite OPEC+ cuts
Saudi Aramco has told at least five customers in North Asia they will receive full contract volumes of crude oil in November, several sources with knowledge of the matter said on Monday.
The full supply allocation comes despite a decision by OPEC+ to lower their output target by 2 million barrels per day.
Saudi Energy Minister Abdulaziz bin Salman had said the real supply cut would be about 1 million to 1.1 million bpd. Analysts expect Saudi Arabia, the UAE and Kuwait to shoulder much of the production cuts because other OPEC+ members are falling behind output targets.
Saudi Aramco was not immediately available for comment, Reuters reported.
Kremlin praises OPEC+ for countering US ‘mayhem’
The Kremlin on Sunday praised OPEC+ for agreeing to production cuts that had successfully countered the “mayhem” sown by the US in global energy markets.
The OPEC+ decision to cut oil production despite stiff US opposition has further strained already tense relations between President Joe Biden’s White House and Saudi Arabia’s royal family, Reuters reported on Saturday.
The White House pushed hard to prevent the output cut. Biden hopes to keep US gasoline prices from spiking again ahead of midterm elections in which his Democratic party is struggling to maintain control of the US Congress.
Kremlin spokesman Dmitry Peskov said it was very good that such “balanced, thoughtful and planned work of the countries, which take a responsible position within OPEC, is opposed to the actions of the US.”
“This at least balances the mayhem that the Americans are causing,” Peskov said, according to Russian news agencies.
US Treasury Secretary Janet Yellen said a decision by OPEC+ to cut oil production was “unhelpful and unwise” for the global economy, the Financial Times reported.
(With input from Reuters)