January New York Mercantile Exchange (NYMEX) crude prices were last traded at $26.43 per barrel at 0825 GMT, down 44 cents from New York's close last Wednesday.

US crude futures markets were closed on Thursday and Friday to mark the Thanks giving Day holiday in the United States.

Iraq confirmed on Saturday it would accept a six-month extension of its ``oil-for-food'' deal with the United Nations.

``We confirm we will deal with a resolution of an extension of six months, when it comes,'' oil minister Amir Muhammad Rasheed told reporters.

But there were no details on when exports might resume. Iraq suspended exports early last week, after it rejected plans to extend the latest round of sales by two weeks.

Iraq said the two-week extension was impractical and represented a US move to pressure other Security Council membersinto accepting a draft resolution on weapons inspections. The suspension drove NYMEX oil prices to near nine-year highs of $27.15 per barrel as the market fretted the halt in Iraqexports would exacerbate Opec's production cuts. The oil-for-food deal permits Iraq to sell $5.26 million worth of oil every six months so that it can buy food and medicine.

But Saudi Arabia, the world's biggest exporter, reassured the market late last week that it was committed to maintaining stability in the market and would not allow prices to overheat.

Saudi Arabia was ``required to strive to ensure the stability of the world market in a way that protects interests of all consumers and guarantees at the same time the interests of the producers,'' prince Abdullah said on Thursday.