DHAHRAN, Sept 22: Despite the weakening oil prices and Iraq attending the Vienna oil producers’ ministerial meeting for the first time since the US occupation, the oil-producing group Opec is expected to maintain the current output quotas in its Wednesday meeting, analysts strongly feel.

The Vienna meeting is taking place in the backdrop of weaker oil prices in recent days; losing about $4 a barrel this month, as record imports boosted US oil inventories. The Opec monthly report on Friday also expressed concern about too much oil reaching the market.

“Cuts in quotas are going to have to come over the next 12 months,” says Paul Horsnell of Barclay’s Capital in London. “I would suspect that there would not be a change at this (Vienna) meeting, but I would not be horribly surprised if there was.”

Seven Opec members — Saudi Arabia, Iran, Venezuela, Kuwait, Algeria, Indonesia and Qatar — have signalled any change in the output quota at the Wednesday meeting “unlikely”. Opec has maintained its output quota in its previous meeting in June and July, despite some speculations that the oil producing group needs to lower output in the event of Iraq’s re-entry into the oil export arena after the US led war on Iraq.

“I don’t think Opec will do anything,” said Doug Leggate of the Citigroup Inc in London. He expects the Brent to average $26 a barrel for the rest of 2003. “The pressure point comes next year, when the pace of Iraqi output may increase.”

The Opec Vienna meeting would be held in backdrop of a fall in prices in 2004. The International Monetary Fund (IMF) said in a report last week that oil prices might decline by more than 10 per cent next year.

The London-based Centre for Global Energy Studies (CGES) in its monthly report says that oil prices look set to remain firm, at least until the end of the year. The CGES expects the Dated Brent averaging almost $28.5/bbl in 4Q03. However, if the Russian output continues to surge at the current level and Iraq maintains the restoration of oil expects, the CGES predicts that the turning point could come as early as Q104.

Excluding Iraq, Opec production has already declined since its peak in May this year, while the war in Iraq was still on. Opec pumped 25.78 million barrels a day in August, 750,000 barrels a day less than in May, Bloomberg estimated. Opec has been targeting the production level of 25.4m barrels a day since June 1.

Iraq does have any allocation within the Opec ceiling currently. Thamir Ghadhban, the chief executive of Iraq’s oil ministry, said this month Iraq would not accept a quota until supply reaches 3.5 million barrels a day. Iraq’s output reached 1.28 million barrels a day last month, up from the 850,000 levels in July.