January New York Mercantile Exchange (NYMEX) crude last traded at $25.20 per barrel at 0745 GMT, up 20 cents from New York's close. The contract rose 41 cents in New York trading on Wednesday.

Prices were spurred higher by Venezuelan comments which indicated existing Opec output cuts would be maintained until March next year, when they are scheduled to be reviewed.

Venezuelan energy and mines minister Ali Rodriguez told reporters on Wednesday current prices were "satisfactory" and that Venezuela would work to stabilise the highly volatile market.

Responding to a question as to whether Opec planned to raise production if prices rose further, Rodriguez replied: "No".

"In March, the decision will be taken according to the various indicators in the market," he said.

Opec has pledged to hold back 4.3 million barrels per day of crude supply.The market had earlier reacted nervously to remarks by an unidentified senior Opec delegate that Saudi Arabia and other major producers were likely to raise output if NYMEX crude prices were at $25.00 per barrel or higher on a sustained basis.

"The general trend among Saudi Arabia and other producers is that if prices stay high at $25 or above for (West Texas Intermediate) and there is growth in demand and inventories are down, then the tendency would be an increase in production," the delegate said on Wednesday.

Prices will find support from Iraq's continued stance against a US proposal for a short extension of its "oil-for-food" with the United Nations.Iraq's Prime Minister Tareq Aziz said in Moscow on Wednesday only a six-month extension to the deal was reasonable.

A Western diplomat said on Tuesday the US would seek a short extension, possibly just one week, of the oil-for-food programme.

This was to provide the UN Security Council with more time to consider its overall policy on Iraq.

Iraq last week had spurned an earlier the US proposal for a two-week extension of the deal, and halted its oil exports, sending oil prices soaring to their highest level in nine years.