Iran's OPEC governor Hossein Kazempour Ardebili told Reuters in a telephone interview his country was unconcerned about the surge in oil prices to fresh nine-year highs because the average price this year was still too low for producers.

Oil prices had also been boosted by news last week that Iran had deferred some November cargoes from its main loading terminals at Kharg Island and Lavan.

But Ardebili said the move was designed to allow Iran to deplete crude supplies being held in 12 tankers stationed in the Gulf. Although Iran said the floating storage of about 21 million barrels had been within its OPEC quota, rumours had spread across markets that Tehran may have been overproducing.

``We want to end rumours that we are putting too much on our tankers. We are just going to deliver to our clients within our production allocation,'' Ardebili said. ``The tankers are operational now and they are going to be depleted.''

OPEC and other big producers are trying to build on the success of production cuts of nearly five million barrels per day (bpd).

It is under pressure to manage a volatile market amid long-term questions over stockpile levels and price stability.

International Brent crude futures closed strongly to finish near session highs on Monday and move within sight of $26.

The fresh gains came as OPEC power Iraq confirmed that it was ending oil exports under the sixth phase of the United Nations oil-for-food programme. But Ardebili echoed many cautious OPEC officials who have said they would not over-react to short-term price movements,he added. ``This (rally) is speculative and more psychology,'' said Ardebili, senior adviser to Iranian oil minister Bijan Zanganeh.

``There are some money and funds coming into the market. It is not going to have a big effect on market fundamentals. The average price this year is very low, $4 too low", he added.

Oil traders and analysts are taking a bolder view of OPEC's options when the production cuts expire in March. They say higher prices could hurt demand in key markets and that the depletion of oil stocks will force a hike in output.

Ardebili said OPEC was not anxious about current market developments and although an output increase had been discussed in recent consultations between ministers, no such move was expected before third quarter 2000. ``There is growing support among member states that the second quarter is not the time for an increase in the production ceiling.

It has to take place at least one quarter after that,'' he said. ``People are talking about it.'' Oil powers Saudi Arabia, Venezuela and Mexico - the masterminds of the global supply curbs - moved last week to reassure markets of their resolve, saying after talks in Riyadh that the cuts would remain in place until April.

Ardebili had a similar message for oil traders placing bets on the latest market movements.``We can assure the market we are very sensible and reasonable. We will not be overreacting to any speculative movement in prices,'' he said.

``The fundamentals are not going to change because of a dispute betweenIraq and the UN. It would be naive to think that...will have a grave impact on fundamentals.''