Brent crude was 18 cents lower at $19.35 a barrel at 0952 GMT, after rebounding 68 cents on Friday on reassurances by Venezuela that it saw no need for an increase in cartel output.

Tight US gasoline supplies and unrest in OPEC exporter Nigeria were additional factors helping inspire speculative fund buying that pushed the benchmark to a Friday settlement of $19.53.

Brent hit a 20-month peak of $19.55 during Friday's session, its highest value since November 1997.

Oil's five-month-old rally ran out of steam in the middle of last week on comments by the president of Venezuela's state oil company that producers should agree to hike output if US crude prices rose above $22 -- equivalent to about $20.50 for Brent.

Prices have nearly doubled since March when exporter group OPEC and a handful of other producers agreed a year offresh curbs on supply worth 1.7 million barrels per day.

The agreement was aimed at pulling the plug on a world oil glut that caused one of the worst price slumps on record, wiping off $50 billion in 1998 from the group's export revenues.

The market drew fresh impetus on Friday from remarks by Mexican energy minister Luis Tellez that he was confident Saudi Arabia would stick to its promised oil output cuts, regardless of oil prices, and hoped Venezuela would do the same.

That followed remarks by Venezuelan oil minister Ali Rodriguez to a business gathering in Caracas on Thursday that stockpiles of oil worldwide had not fallen enough to warrant any increase in supply.

On Monday, unrest in Nigeria helped underpin sentiment.

Nigerian newspapers said youths in southern Nigeria were holding 64 workers contracted by Royal Dutch/Shell as hostages after taking over a drilling rig.

They said the seven expatriates and 57 Nigerians had been held since last week by ethnic Isoko youths in Ozoro and Ovrodecommunities which are demanding money and more amenities for local people.

Around 250,000 bpd of Shell's 800,000 bpd output has been disrupted in recent weeks, causing cargoes to be delayed by at least a week and schedules to be reduced.

And in the North of the country, Nigerian authorities are trying to cool ethnic tempers after rioting between the two biggest tribes left at least 19 dead in the city of Kano.

However brokers noted a bearish report that Iran raised crude oil exports by 63,000 bpd in June to 2.12 million barrels.

The Middle East Economic Survey (MEES), a weekly industry publication, said Iran's crude production averaged 3.54 million bpd, up from May's 3.477 million bpd. Iran has an OPEC quota of 3.359 million bpd.