KUWAIT, 13 December 2005 — OPEC paved the way for a cut in oil supplies early next year with an agreement yesterday that aims to pull organization’s production back within its official limits.

OPEC, provider of a third of the world’s oil, retained its official 28 million barrels per day ceiling to keep consumer nations supplied through the winter. But it said it would rein in excess output to prepare for slacker demand in spring.

“Now we are preparing ourselves for the second and third quarters of next year because in these two quarters demand is usually less,” Libyan Energy Minister Fathi Omar ibn Shatwan told reporters after the meeting.

Ministers said the deal would mean a reduction of 200,000-300,000 bpd, a drop in the ocean for the 84 million bpd global oil market even if wayward OPEC producers adhere to it. But the move could set the stage for a bigger cut.

“We have to comply with the ceiling now, and maybe we will discuss a cut in the future,” Shatwan said.

Qatari Oil Minister Abdullah Al-Attiyah suggested a deeper cut was just around the corner. “We are paving the way for the meeting at the end of January. I think that meeting will be very important,” he said. “We will take steps to cut production if we see the market is saturated and now I see the market has started to become saturated.”

Oil prices jumped by around $1 yesterday. Traders, meanwhile, were keeping an eye on an enormous fire at a fuel depot north of London, which holds some five percent of Britain’s fuel stocks.

New York’s main contract, light sweet crude for delivery in January, surged 91 cents to $60.30 per barrel in pit trading. In London, the price of Brent North Sea crude for January delivery soared $1.11 to $58.42 per barrel in electronic trading.

World oil prices rose to the highest levels for more than a month last week as cold weather descended on the US northeast, increasing the likelihood of higher fuel demand for the energy-hungry region. Crude futures on Friday had breached $61 per barrel in New York and almost $60 in London, levels not reached since Nov. 4.

In real terms, the cost of a barrel of oil this year has been the highest for a quarter of a century, hurting economic growth. “The market is focusing on the word ‘cut’ but OPEC is absolutely right to be worried about the second quarter,” said Mike Rothman, an oil analyst at ISI group.

The organization has been pumping at a 25-year high in response to near record prices and calls from consumer nations worried about the cost to their economies.

OPEC countries have grown accustomed to high prices. But some in the cartel are worried the good times could end with the spring thaw. Demand normally slips and oil stocks build in the second quarter. Prices consequently slide. Ministers will meet on January 31 in Vienna.

“It warrants a review as we get closer to the second quarter of 2006. That may warrant actions of a different kind to keep the market in balance,” Minister of Petroleum and Mineral Resources Ali Al-Naimi, said.

Naimi, who steers oil policy for the world’s biggest exporter, said oil stocks in the industrialized world were already relatively high. “If we continue the way we are, that number will increase.... That’s a lot of crude sloshing around...so come the second quarter that could be a heavy depressant on price. I wouldn’t use collapse, but I would say decline,” he said.

As expected, OPEC’s offer to supply all its spare oil will lapse at the end of December. The organization made the gesture in September in response to prices that raced to a record $70.85 a barrel, but there have been few takers for the crude.

Strong buying from the United States, China and India has fuelled a two-year rally that has seen a doubling in the oil price. A shortage of refineries to churn out gasoline, diesel and heating oil has added impetus.