An OPEC flag is seen on the day of OPEC+ meeting in Vienna in Vienna, Austria October 5, 2022. REUTERS/Lisa Leutner

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 OPEC+ cuts and ahead of the European Union embargo on Russian oil.

Brent crude futures fell 81 cents, or 0.8%, to $97.11 a barrel by 0131 GMT while West Texas Intermediate crude was at $91.88 a barrel, down 76 cents, or 0.8%.

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. read more

"Profit-taking might be the main reason to pressure the oil prices today after five-day gains last week," CMC Markets analyst Tina Teng said.

Brent and WTI posted their biggest percentage gains since March last week after the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, agreed to lower their output target by 2 million barrels per day.

The OPEC+ production cuts, which come ahead of a European Union embargo on Russian oil, will squeeze supply in an already tight market. EU sanctions on Russian crude and oil products will take effect in December and February, respectively.

"The cut is clearly bullish," ING analysts said in a note.

"However, there is obviously still plenty of other uncertainty in the market, including how Russian oil supply evolves due to the EU oil ban and G-7 price cap, as well as the demand outlook given the deteriorating macro picture."

Analysts at banks and brokerages have raised their crude price forecasts and expect Brent to rise above $100 a barrel in the coming months.

A possible loosening up of COVID-19 curbs in China in the fourth quarter and in 2023, could set oil demand on recovery and offer further upside to oil prices, CMC's Teng said.

On Friday, Russian President Vladimir Putin signed a decree to create a new operator for the Exxon Mobil Corp-led (XOM.N) Sakhalin-1 oil and gas project in Russia's Far East. 

Oil production at the Sakhalin-1 project fell to just 10,000 barrels per day (bpd) in July from 220,000 bpd before the war in Ukraine.