The 20-year-old has already scored twice in two games for the Tigers, bagging a brace in the 3-0 win over Barnsley, with his current deal running until the New Year.
City chairman Paul Duffen told the Hull Daily Mail: "At this moment we are honoured to have a player like Fraizer at the club and that is down to Phil Brown and his contacts.
"The current market for quality strikers would suggest the price for a player like Fraizer would be out of range for most sides in the Championship.
"Given how highly regarded he is at Manchester United as well, I would suggest there would be very little chance of us being able to sign him permanently.
"But, if come January, he is not considered quite ready for the Premier League and he is enjoying his football here, we would certainly look to make it a loan until the end of the season."