* Global economic weakness overshadows meeting
* Saudi Arabia leans towards no change
* Some members agree, others want cut
By Barbara Lewis and Simon Webb
LONDON/DUBAI, March 11 (Reuters) - A fragile world economy and a firmer oil price might convince OPEC ministers meeting in Vienna on Sunday that all they should do for now is enforce more strictly the bold supply cuts already in place.
Saudi Arabia, the biggest and most influential of the 12-member producer group, is among those who believe it is too soon to agree new output targets, sources have said.
"There is no need to speak of a new production cut as it would be enough to enhance compliance with the previous decisions," the Saudi-owned al-Hayat newspaper said this week, citing unnamed sources.
The kingdom has not commented on the record.
An OPEC delegate from a Gulf country aligned with Saudi Arabia also said the group could afford to wait before further action as the oil price traded around $45 a barrel this week, up from the December low of $32.40.
"The market is feeling the effect of OPEC's cuts so far. It is tightening," the delegate told Reuters. "If everything is going in the right direction, probably this is an indication we shouldn't rush into another decision."
That does not mean the group's output policy decision will be straightforward.
Other members, including Libya, Algeria and Venezuela, have backed the idea of a further reduction in output to help offset the first two-year drop in oil demand since the 1980s and inventories are still high even after the supply reduction.
They equate to around 57 days of forward cover -- five days more than OPEC considers comfortable. Iran, often the first to demand action, has also said there is no need to cut again yet, but Iranian Oil Minister Gholamhossein Nozari said cooperation from non-OPEC producers and an unspecified "mechanism to repair prices" was required.
The prospect of a further decline in demand, especially moving into the second quarter, when oil consumption is typically at its lowest, could still push OPEC into making a defensive cut in output, said David Kirsch, director of market intelligence services at Washington-based PFC Energy.
"They may conclude they need to be proactive in going against the downside risks," he said.
In that case, core Gulf OPEC members would not wait for those slowest to comply with targets to bring output down, he said.
"Compliance is an issue but I don't think for one second that Saudi, Kuwait and the UAE will tie their hands with internal OPEC politics rather than take action they see as necessary to improve the health of the global oil market."
HEALTHY ECONOMY OR HEALTHY MARKET?
Sadad al-Husseini, a former top official at state oil giant Saudi Aramco, argued there were several reasons why the Organization of the Petroleum Exporting Countries should leave output targets intact.
"Judicious OPEC leaders will seek to put their house in order before taking on the complex issues of further quota adjustments," he said in a written comment.
He cited imperfect compliance -- although at around 80 percent it is historically very high -- and said it was too early to assess the impact of OPEC's 4.2 million barrels per day (bpd) output reduction since September last year.
Husseini said OPEC would be looking ahead to a summit of the Group of 20 developed and emerging nations in London in April.
"They would not wish to appear to be undermining this meeting, which will focus on seeking resolutions to the global financial crisis," he said. "OPEC is in fact quite concerned in regards to the global recession and will want to see a global recovery before floating prices to higher levels."
Given the depth of the financial downturn, analysts have said the oil price would only rally significantly when the economy did and not in response to OPEC action.
"The question going forward is whether and when they could start to see some uplift or do we continue bouncing around the $40-$50 range. In the end the answer to the question is going to depend on the economy," said Mike Wittner of Societe Generale.
"OPEC can keep on reacting, but it can't turn around the economy."
On Jan. 28, the International Monetary Fund cut its forecast for global growth to 0.5 percent in 2009 and some economists have said the economy will be even weaker than that.
The International Energy Agency, which represents the interests of oil consumers, has revised downwards its oil demand forecasts following gloomy IMF data, as has OPEC, with both energy bodies now predicting a further contraction in oil use this year following on from last year's fall.
One positive factor for the economy, cited by the IEA, is that the lower oil price, compared with last year's peak of nearly $150 a barrel and average price of close to $100 for 2008, is effectively a huge fiscal stimulus.
So far this year, the average price has been around $41.
But the IEA agrees with OPEC that oil prices at current levels are too low to stimulate investment in new production. Abandoned and delayed projects will eventually send the price soaring again -- just as they did after the last price crash.
After prices fell towards $10 a barrel in 1998, they tripled by 2000, dipped in 2001 and then embarked on the six-year rally that propelled them to last July's record. (Additional reporting by Alex Lawler, editing by Anthony Barker)