Feb. 25 (Bloomberg) -- Saudi Arabia, the world's biggest oil producer, may lobby OPEC to maintain output quotas at its March 5 meeting while trimming its own production to curb global supply, the Centre for Global Energy Studies said.

``OPEC is likely to desist from making any output cuts until the second half of the year,'' the London-based center, known as CGES, said in a report e-mailed today. ``Saudi Arabia may insist on keeping quotas the same while varying its own output in pursuit of high prices.''

The Organization of Petroleum Exporting Countries, which produces more than 40 percent of the world's oil, will ``hesitate'' to adopt the supply cut suggested yesterday by its president, Algerian Oil Minister Chakib Khelil, after prices rose to a record above $101 a barrel last week, CGES said.

Saudi Arabia, which holds sway over the group as its largest member, is reducing the discounts it offers customers to ``choke off'' demand and using this approach ``will continue to act quietly to restrict stock building,'' according to the report.

Saudi Arabia will act to ``support oil prices well above the minimum level it needs,'' the center said. The kingdom's budgetary expenses require that the OPEC basket price, an average of crude values from each of the group's 13 members, should be at least $62 a barrel this year, according to CGES.

OPEC Basket Price

The basket price has averaged $88.94 a barrel so far this year, compared with an average of $93.40 for crude futures traded on the New York Mercantile Exchange.

``We don't expect to put more oil in the market,'' Algeria's Khelil told reporters in Algiers yesterday. Inventories are ``very high and international demand is expected to decrease in the second quarter. OPEC is going either to keep production or reduce it.''

Separately, Iranian Oil Minister Gholamhossein Nozari raised the issue of a cut yesterday, and said a reduction is ``likely'' as crude demand typically declines in the second quarter, the state news service Shana reported.

CGES expects that Dated Brent, a benchmark based on the value of North Sea oil, will average $84.50 this year compared with $72.90 in 2007. The biggest risks to this forecast include a recession that curbs demand in key economies by 300,000 barrels a day. There is a one in five chance this will happen, it said.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

Last Updated: February 25, 2008 11:00 EST