Oil fell slightly on Monday, wiping out an early 1 percent spike over $47 on speculation OPEC may agree to cut output further at a March 15 meeting.

All options are on the table, he told reporters in Qatar when asked if OPEC, which pumps more than a third of the world's oil, would announce another reduction in supply at its meeting in Vienna.

The severe downturn in the global economy over the last year has reduced world energy consumption sharply and oil prices have tumbled from a peak of almost $150 a barrel in July.

U.S. crude for April delivery was 36 cents lower at $45.16 per barrel by 1227 GMT (8:27 a.m. EDT), after hitting an earlier high of $47.03.

London Brent crude was down $1.59 cents at $43.26 a barrel, trading at a near $2 discount to U.S. crude. Brent closed at a discount to U.S. light crude oil futures on Friday, the first such discount since December 11.

Weak European refinery margins have put pressure on Brent prices, widening the spread to U.S. crude.

French oil major Total will reduce runs at its refineries operating in France by about 20 percent due to poor margins, trade sources said on Monday.

Speculation grew over OPEC's next move.

Some in the market expected a cut of around 1 million barrels per day (bpd) but others said that would be difficult and painful to implement.

I think they will seek better compliance with existing quotas, said Christopher Bellew, oil broker at Bache Commodities in London. My feeling is that OPEC is able to prevent further price weakness but until the over-hang of oil stocks begins to be eroded, they will struggle to raise prices.


OPEC has already promised to cut oil production by a total of 4.2 million bpd from the production levels seen in September and a Reuters survey suggested the group has come close to meeting that pledge with compliance of more than 80 percent.

Badri also said OPEC will slash its 2009 oil demand forecast by 1 million bpd because of the global economic slowdown. He said that although the oil price was not really acceptable to the producer group, it was not as bad as it could be, given the state of the world economy.

In a sign some oil investors may be expecting OPEC to further cut output at its meeting, there were fewer open interest positions at the $25, $30 and $35 put options on the NYMEX April crude oil contract versus the previous week, according to Reuters data on Friday.

Open interest positions remained bulked at the $50 and $55 call options, with more at $55 than the previous week.

(Reporting by Christopher Johnson & Joe Brock; editing by William Hardy)