"We don't think prices are too high at this point. These might be short-term price hikes," Mexican oil minister Luis Tellez said before meeting his counterparts from OPEC heavyweights Saudi Arabia and Venezuela. December New York Mercantile Exchange (NYMEX) crude futures rose to $26.11 in Asia, 41 cents higher than New York's close on Tuesday and the highest level since January 1997. Tellez, Saudi Arabia's Ali al-Naimi and Venezuela's Ali Rodriguez were meeting in Riyadh to talk about market conditions.

The three countries were the architects of a pact to cut more than five million barrels per day from world supply, which rescued the market from its worst crisis in decades. Tellez and Rodriguez said earlier it was too early to decide if the cuts, due to last until the end of March, should be extended.

They said the producers would wait until March to determine whether to extend or lift the cuts. "We have to take a serious and careful look at stockpiles in March. Only then can we decide what to do," Rodriguez said.On Monday, Kuwait oil minister Sheikh Saud Nasser al-Sabah said OPEC's oil ministers had agreed to extend the cuts beyond March.

"The principle now is accepted by all. What remains now is to decide on the duration," he said.

On Saturday, Qatar oil minister and OPEC president Abdullahal-Attiyah said it would be realistic if the cuts were extended until the end of the year 2000. On Wednesday, Rodriguez said he was unconcerned that oil stocks could fall too low before March 2000. London-based Centre for Global Energy Studies said earlier this week oil stocks were so tight that commercial stock cover held by oil companies could hit minimum operating levels by early next year. American Petroleum Institute data late on Tuesday reiterated the trend.

It reported crude stocks in the United States dropped 2.5 million barrels to 309 million barrels in the week ended November 12, almost 31 million barrels below stock levels a year earlier. API said gasoline stocks fell a large 4.9 million barrels, when a rise had been expected, to 189 million barrels -- the lowest level in more than two years.

Global oil demand is expected to rise in the northern hemisphere winter. If combined with continued OPEC compliance with its production cuts, there could be record falls in stocks in the next few months, the International Energy Agency said last week. But traders said that the comments on Wednesday from Venezuela and Mexico could dampen sentiment given the expectations built up in the past week suggesting OPEC had effectively agreed to extend the cuts beyond March.