Benchmark Brent for January delivery was 20 cents adrift at $25.32 a barrel but still comfortably in sight of a post-Gulf War highs of $25.90.

The world's largest producer and exporter assured edgy markets on Thursday it would not allow prices to overheat in a statement apparently directed at concerns caused by a two-week suspension of Iraqi of exports.

But traders did not detect an automatic willingness among the Organisation of the Petroleum Exporting Countries members to rush additional supplies onto the market any time soon.

Peter Gignoux of oil brokers Salomon Smith Barney said the statement by Saudi Crown Prince Abdullah vowing efforts to stabilise the market was a restatement of overall Saudi policy.

"I don't see it as a policy shift. It's practical management rather than anything else."

"It's part of a characteristicview of what to do if the market gets desperately overheated -- and indeed the US government itself is discussing an SPR (Strategic Petroleum Reserve) release in case of supply disruption."

No early rush of extra barrels expected from Opec
An executive at a European trading house said he would only expect to see a surge in production from Opec if Iraqi-induced supply disruption lasted into the new year. Opec was enjoying current high prices too much to act precipitately, he said.

"If you are looking for something short term from Opec, forget them doing anything this year."

"If the supply shortage is sustained then eventually the Saudis will have to show Opec is a responsible organisation. But it's going to be a long time coming."

Prince Abdullah said Saudi Arabia was "required to strive to ensure the stability of the world oil market in a way that protects interests of all consumers and guarantees at the same time the interests of producers".

Opec seen signalling Y2K crisisrole
Gignoux said the statement applied as much to jitters about fears of millennium disruption as to concerns about Iraq, which has suspended its 2.4 million barrels per day (bpd) of exports in a dispute about sanctions at the UN Security Council.

The US government said this week it was prepared to sell crude oil from the country's Strategic Petroleum Reserve if a Y2K computer problem causes a disruption in oil supplies.

The International Energy Agency, the West's energy watchdog, sees growing evidence of consumer stockpiling of non-oil goods helping boost oil demand as factories work more intensively.

"I look on this (Saudi statement) as to do with coming up to Y2K," Gignoux said. "The SPR says it is there to release barrels if there is a crisis. So Opec is saying `Us too. We'll help'."

Iraq's move has helped lift prices to their highest since the start of the 1991 Gulf War in which a US-led multinational coalition pushed Iraqi occupation troops out of Kuwait.

Support has also come fromcuts in Iranian November crude export loadings as Tehran tries to keep within its Opec quota.