The December gained 14 cents on Wednesday helped by comments from Saudi Arabia's oil minister Ali al-Naimi, who said producers had "absolutely no plans" to raise output before the March end expiry of the output cut accord.

The Venezuelan oil minister Ali Rodriguez echoed the Saudi comments on Thursday saying his country will keep to its Opec production quota until March 2000. Rodriguez said he was not concerned with the recent drop in oil prices. "Lovely prices. It's very good at the moment," he added.

But Rodriguez said Venezuela would wait until March before deciding on the possibility of extending the production cuts. On Wednesday, Naimi said it was possible the Opec output cuts could continue into the second quarter next year if there were doubts about market conditions.

He said he was still waiting for clear signs that world oil demand had picked up and that he believed inventories were not falling fast enough. Saudi Arabia and Venezuela, together with non-Opec producer Mexico had engineered the supply cuts early this year to lift prices from historical lows. The three producers are to meet in Riyadh on November 17 to discuss the progress of the output cuts and market conditions. The current US crude prices were short of the 32-month high of $25.12 reached on September 29, following a sell off by speculators.

The September peak was 142 per cent higher than the $10.35 per barrel level that Nymex crudesp traded at in December 1998.But as winter demand looms, traders expected prices to trend upwards in the coming weeks.