By 0734 GMT, the New York Mercantile Exchange October delivery crude futures were last traded at $33.26 a barrel, down six cents after a 58-cent gain in New York on Wednesday. In March, NYMEX crude soared to nine-year highs of $34.37, when the market was most concerned about tight gasoline supplies ahead of summer demand. Now crude was wrestling with fears of a heating oilshortage for the winter.

News this week that US crude stocks rose and OPEC kingpin Saudi's would work towards a "suitable rise" in production to restore market balance. The Supreme Council for Petroleum and Mineral Affairs, the kingdom's highest authority on energy affairs, instructed Oil Minister Ali al-Naimi to review the mechanism to achieve this stability in coordination with other countries.

Saudi's signal of higher OPEC output broke weeks of silence from the world's biggest oil exporter.

US crude inventories rose last week by 5.26 million barrels according to the American Petroleum Institute (API) on Tuesday, but gave little comfort as stockpiles in the world's largest energy market were still near 24-year lows.

Heating oil stocks, significantly lower than a year ago sparked worries of tight supplies this winter prompting prices to spike above $1.00 per gallon to a decade high.

NYMEX heating oil on Thursday was last traded in Asia at 99.30 cents per gallon.

Pressure is mounting on the Organisation of Petroleum Exporting Countries (OPEC), which controls the bulk of internationally traded oil, to hike output when it meets on September 10.

OPEC has responded cooly as the group wants to avert a price collapse.Just less than two years ago, oil prices sank to its lowest level in a decade at around $10 a barrel, forcing OPEC to introduce deep supply cutbacks.

Price hawks of the group - Venezuela and Iran - have said that market fundamentals were sound and blamed speculation, high oil consumption taxes and refinery bottlenecks for recent runaway levels.

"I am convinced that if we increase production in September, prices will keep rising," Venezuela's Oil Minister Ali Rodriguez told a local radio interviewer on Wednesday.

"Most analysts agree that prices could surpass $40 per barrel by the end of the year if consuming countries do not help us to stabilise prices," Rodriguez, who is also the OPEC president added. (Reuters)

Prices have refused to fall below $30 a barrel despite public outcry from consumers in major oil importing countries like the United States, Europe, Japan and Thailand.

After two failed attempts to ease soaring prices this year, OPEC's signal of an extra 500,000 barrels-per-day (bpd) output, through its price band mechanism, was also seen as insufficient, dealers said.