Oil rose more than $1 to near $47 a barrel on Monday on speculation OPEC may cut output again when it meets on Sunday.
OPEC Secretary-General Abdullah al-Badri said the 12-member producer group would consider reducing output again at the meeting as it tries to counter downward pressure on oil prices from falling demand.
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.
Saudi Arabia wants OPEC to discuss stricter compliance with existing supply curbs, a Saudi-owned newspaper reported on Monday, and cited sources as saying the group should not discuss another cut.
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.
Saudi Arabia, the top OPEC oil exporter, will lower supplies to one European oil company in April, a trading source said on Monday, less than a week before the group meets to review output policy.
Some in the oil market expected an OPEC 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.
The severe global economic downturn has reduced world energy consumption sharply. Oil prices have tumbled from a peak of almost $150 a barrel in July.
Badri also said OPEC will slash its 2009 oil demand forecast by 1 million bpd. 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 OPEC member Nigeria, Royal Dutch Shell
(Reporting by Joe Brock, Chris Baldwin and Christopher Johnson in London and Matthew Robinson in New York; editing by William Hardy and David Gregorio)