The March New York Mercantile Exchange (NYMEX) crude futures last traded at $28.65 per barrel at 0842 GMT, up by 45 cents from the settlement in New York.

Traders said underpinning the market were calls from producers for current output curbs beyond the planned end March expiry.

The latest came from oil ministers from Iran, Algeria and Libya, who met in Tripoli on Friday.

The three agreed to recommend a six-month extension of the output curbs which has succeeded in lifting prices to their highest levels in nine-years.

Libyan energy minister Abdullah al-Badri told Reuters by telephone from Tripoli he had agreed with new Algerian oil minister Chakib Khalil and Iran's Bijan Zanganeh to propose OPEC extend the supply curbs until September.

Prices of US crudes have gained more than $3.00 a barrel or 11 per cent since thestart of the year, on firm signals by key OPEC members the production cuts will likely be extended.

Last week, US crude prices on NYMEX surged to a nine-year peak of $29.95, unseen since the Gulf War of 1991.

Prices since then have slipped slightly as some traders cashed in their gains at the highs.

Bullish OPEC expectations coupled with forecasts that a cold snap in the US Northeast will last until the end of January have generated fears of a supply shortage.

The International Energy Agency (IEA) has said that if output cuts by OPEC continued, the global supply shortfall would be by two to three million barrels per day (bpd) in the first quarter of 2000, and by one to 1.5 million bpd in the second quarter.In its monthly report last week, IEA said stocks in industrialised countries fell by almost two million bpd in November.

It said the US and large European countries showed significant drops in stockpiles of refined products.