OPEC unlikely to change quota: Report

OPEC producers on Monday were leaning heavily in favor of keeping oil output limits on hold to allow world crude prices to ease from winter peaks, reuters reported.

Ministers from the Organization of the Petroleum Exporting Countries called for stricter adherence to existing supply quotas to prevent a price slump in the second quarter when seasonal demand drops.

Among the early arrivals in Algiers for a Tuesday meeting, none so far have suggested a formal cut in production limits that could send prices spiraling again. "We fully understand leakage because the price is strong," OPEC President Purnomo Yusgiantoro of Indonesia told reporters, a reference to wide-scale quota-busting among the 11-member group.

"When we are facing the second quarter drop in demand we have to see what the adherence is among the members."

U.S. oil hit $36 a barrel last month as fund managers piled into commodities and a severe cold spell hit the United States, the world's biggest oil importer. It has slipped since and on Monday traded up 12 cents at $32.60 a barrel.

Stressing the need for quota discipline, number two producer Iran said it saw no need now to reduce official production limits.

"We believe that preserving the current OPEC quota is the best choice," said Iranian Oil Minister Bijan Zanganeh.

Prices could fall sharply if second quarter forecasts for a much bigger drop in demand than normal prove accurate.

The International Energy Agency in Paris is projecting second quarter demand to fall short of supply by some four million barrels a day, double the usual gap for the period.

Most ministers, though, appear to be taking a relaxed view of those forecasts, bolstered by the knowledge that they can act on output if necessary when they meet again at the end of March.

OPEC, controlling half the world's crude exports, is estimated to be pumping as much as 1.8 million barrels a day in excess of formal limits of 24.5 million bpd.(*)