OPEC will weigh a modest boost to oil supply at a meeting on Wednesday, but a $10 retreat last week in crude prices from a record high near $100 a barrel could tip the balance away from pumping more.

The group that exports about 60 percent of the world's oil mostly shares the unease of consumer governments about high prices which add a strain to the world economy.

OPEC will play its responsible role if there is a need for it to intervene and increase production after analyzing the market, Kuwait's acting oil minister, Mohammad al-Olaim, told Reuters.

An increase would be the Organization of the Petroleum Exporting Countries' second this year and would come as concern grows about the health of the U.S. economy and amid signs that high prices are slowing demand for oil, the main source of OPEC countries' income.

Top world exporter Saudi Arabia has expressed concern about high prices but has avoided any comment on likely policy.

Indonesia, with limited influence as one of OPEC's smallest producers, has said it would support an increase of 500,000 barrels per day -- almost 2 percent of supply from the 10 members bound by quotas.

There is a common view in the 13-member group that consumers have enough crude and that speculators, a weak dollar and political tension have sent prices soaring.

There is absolutely ample supply, Saudi Oil Minister Ali al-Naimi, OPEC's most influential voice, said last week.

The price movement has nothing to do with the fundamentals of the market.


OPEC officials made similar noises at a meeting in September when, with oil a touch under $80, they decided to raise supply by 500,000 bpd from November 1, a step that failed to stem the rise in prices.

Saudi Arabia, which holds most of OPEC's unused production capacity, was the driving force behind that increase, which price hawks including Venezuela opposed until the last minute.

In Abu Dhabi, we'll see if the Saudis pull something out of the hat at the last minute, said Paul Tossetti, director of market analysis at Washington-based PFC Energy.

They are the only ones with the capacity to make any difference.

Oil fell more than $2 to below $89 a barrel on Friday, partly on expectations that OPEC will boost output. It has dropped from a record $99.29 in late November.

Consumers represented by the International Energy Agency are worried about falling inventories when seasonal demand is rising ahead of the northern hemisphere winter.

The IEA said on November 13 that oil stocks in member-countries of the Organisation for Economic Cooperation and Development fell in September to equal 52.8 days of demand, close to the five-year average.

OPEC says it can make a considerable output increase if needed. The Saudi oil minister puts the group's spare capacity at 3 million bpd, of which Riyadh holds the bulk.

The supply target for the 10 OPEC members bound by production decisions -- all except Iraq, Angola and new member Ecuador -- rose to 27.25 million bpd as of November 1.

Angola is expected to receive a supply allocation of around 2 million bpd at the meeting, a level tailored to accommodate the country's steady production growth.

Some analysts say the outlook for the first quarter does not imply a tight market -- and note that a further drop in prices could steer OPEC towards leaving policy unchanged.

OPEC's most recent figures peg demand first-quarter demand for its crude at 31.35 million bpd, up from October production of 31 million bpd for 12 members minus Ecuador.

I'd put a 60 percent chance of an increase of 500,000 barrels per day, said Mike Wittner of Societe Generale.

The first quarter is actually pretty balanced for oil supplies, he said. There isn't a great need for OPEC oil. If prices continue to ease, maybe they don't do anything.

(Additional reporting by Randy Fabi)