OPEC unlikely to cut oil output: sources

By Alex Lawler and Simon Webb

LONDON/DUBAI (Reuters) - OPEC will find it difficult to cut its oil output because prices are again rising toward a record high, Libya's top oil official and OPEC sources said on Tuesday.

The Organization of the Petroleum Exporting Countries meets in Vienna on March 5 and some members including Iran have urged the group to lower output, even though oil is trading above $98 a barrel.

"There is still more than two weeks to go and prices are at $98," Libya's National Oil Corporation Chairman Shokri Ghanem told Reuters by telephone. "It is too early to say."

"We know that it is not all fundamentals, but whenever the price is like this, it is difficult to cut."

Earlier on Tuesday, OPEC sources said a reduction was unlikely to be decided at the meeting because of rising prices and uncertainty about supply from Venezuela and Nigeria.

"Prices are high and this is not the time to talk about a cut," said an OPEC delegate from one of the group's larger producers, who declined to be identified by name.

"It is too early at this time to make a definitive statement, but the logic would be no change," said a second source familiar with OPEC policy.

Nigeria's oil output has been hit by militant attacks and fellow OPEC member Venezuela is threatening to halt oil sales to the United States over a dispute with the world's biggest oil firm, Exxon Mobil.

The 13 OPEC members pump about 40 percent of the world's oil.

NO INCREASE

Oil rose above $98 a barrel on Tuesday, closing in on a record high of $100.09 reached on January 3.

Prices were up in part because OPEC President Chakib Khelil, who is also Algeria's oil minister, told Reuters on Monday "production is not going to increase -- it will either decrease or be stable".

Iran, OPEC's second-largest producer, is prominent among those calling for a reduction.

"The normal course of events is that we should have a cut in production in March but we will have to review market conditions and world reserves before deciding by how much," Iran's oil minister, Gholamhossein Nozari, said on Sunday.

At meetings in December and earlier in February, OPEC opted to maintain its output targets, despite calls from consumer nations for more supply to rein in high prices.