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Melt butter over medium heat in heavy bottom 3-quart saucepan.
Add diced onion and saute until tender, about 5 minutes.
Add in garlic, continue to saute for another 1-2 minutes, being watchful to not burn garlic.
Stir in ground red pepper, paprika, salt, and black pepper. Continue to stir for about 1 minute to toast the seasonings.
Drain oysters and reserve liquid (oyster liqueur).
Reduce heat to low, add milk, parsley and oyster liqueur.
Cook over low heat until mixture is hot and beginning to steam, and bubbles just start to appear around the edge. Do NOT allow to come to a boil.
Add oysters and continue to cook over low heat for just a few minutes until oysters begin to curl on edges.
Salt and pepper to taste. Serve warm.