July Brent Blend crude ended 22 cents firmer at $28.59 a barrel aftersliding 68 cents on Monday.

Traders were sifting through a continuing slew of statements by Opecofficials signalling the cartel may be ready to contemplate an output hikeat a policymaking meeting on June 21.

Dealers want to know if the Organisation of the Petroleum ExportingCountries will make good on an informal pact to lift output by 500,000barrels per day if prices continue to rise.

Opec president Ali Rodriguez said there were no plans to delay an increaseif the stability pact's trigger is reached - something analysts say couldhappen soon.Rodriguez has said the trigger will activate when the 20-dayaverage of a basket of Opec crudes rises above $28 a barrel.Asked if therewas a likelihood of delaying the production hike due to differences withinOpec, Rodriguez told reporters: "that is not planned, but obviously I am inconstant communication with other ministers and any recommendations theymake will be taken into account."

The average for the Opec basket for the last 20 days to Monday stood at$27.90 a barrel.

Oil minister Ali al-Naimi on Monday signalled the stability pact needed morepreparation before it could be used - but he also later said buoyant marketsprobably needed more crude, something the mechanism will provide if Opecagrees to use it.

The recent rally has largely been due to gasoline market woes in the UnitedStates, the world's largest consumer, and some in Opec say more crude willnot address that situation.

Rodriguez's remarks failed to hurt sentiment, and likewise bears were unableto make mileage out of remarks by Mexico's energy minister Luis Tellez thatproducers should supply more when the second quarter concludes at the end ofthe month.

Bulls on the other hand were galvanised by remarks from a Middle Easterndiplomat in New York that Iraqi oil would stop flowing for about 10 days atstart of the eighth phase of the oil-for-food sale.

Later an Iraqi oil industry source insisted that Iraqi oil officials werestill working towards a smooth transition to the next phase of the U.N.oil-for-food programme to ensure there was no gap in export flows currentlyof around 2.5 million bpd.

In other news, the US Energy Information Administration said world demandfor crude would be higher in the current and fourth quarters than previouslythought, but unchanged in the third quarter.

At the same time, in its monthly short-term energy outlook, the agency'sestimate for world oil supplies increased dramatically for the rest of theyear, with supplies able to keep up with demand exceptfor during the fourth quarter.The EIA said world oil demand would be200,000 barrels per day higher in the current quarter, unchanged in thethird quarter, and 100,000 bpd more in the fourth quarter than it previouslyforecast.