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Oil Updates – Crude Takes a Break; Aramco will maintain full oil supply to North Asia

RIYADH: Oil prices fell on Monday, easing off five-week highs, as the market took profits after strong gains last week on expectations of tighter supply following the cuts from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, and ahead of the EU embargo on Russian oil.

Brent crude futures fell 94 cents, or 0.96%, to $96.98 a barrel as of 7:50 a.m. KST, while U.S. West Texas Intermediate crude was at $91.78 a barrel, down 86 cents, or 0.93%.

Both contracts hit their highest since Aug. 30 earlier in the session but gave up gains, slipping along with stocks in Asia amid tight trade with Japan and South Korea closed for the holidays. .

Saudi Aramco will maintain full oil supply to North Asia despite OPEC+ cuts

Saudi Aramco has told at least five customers in North Asia that they will receive full contract volumes of crude oil in November, multiple sources with knowledge of the matter said on Monday.

The full supply allocation comes despite OPEC+’s decision to cut its production target by 2 million barrels per day.

Saudi Energy Minister Abdulaziz bin Salman had said the real supply cut would be around 1 to 1.1 million bpd. Analysts expect Saudi Arabia, the United Arab Emirates and Kuwait to shoulder much of the production cuts as other OPEC+ members fall behind production targets.

Saudi Aramco was not immediately available for comment, Reuters reported.

Kremlin praises OPEC+ for countering US ‘chaos’

On Sunday, the Kremlin praised OPEC+ for agreeing to production cuts that had successfully countered the “chaos” sown by the United States in global energy markets.

OPEC+’s decision to cut oil production despite strong U.S. opposition has further strained already strained 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 production cut. Biden hopes to keep U.S. gasoline prices from rising again ahead of the midterm elections in which his Democratic Party struggles to maintain control of the U.S. Congress.

Kremlin spokesman Dmitry Peskov said it was very good that such “balanced, thoughtful and planned work of countries, which take a responsible position in OPEC, to oppose the actions of United States”.

“It at least compensates for the chaos caused by the Americans,” Peskov said, according to Russian news agencies.

US Treasury Secretary Janet Yellen said an OPEC+ decision to cut oil production was “unnecessary and reckless” for the global economy, the Financial Times reported.

(Contributed by Reuters)

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