LONDON, Feb 10 - Oil prices tiptoed higher on Tuesday ahead of OPEC's meeting in Algiers, where ministers are widely expected to leave official production curbs unchanged but crack down on leakage above those limits. London Brent futures gained 16 cents to sit at $29.27 a barrel, while U.S. light crude traded 21 cents up at $33.04, extending gains made on Monday as edgy markets covered against the upside risk of a surprise cut. Ministers from the Organisation of the Petroleum Exporting Countries are due to convene at 1100 GMT to review production policy going into the second quarter of the year, when demand for oil usually eases as winter ends in the northern hemisphere. Analysts said crude prices were likely to hold firm or gain slightly in the event of a decision to maintain the current 24.5 million barrel per day quota.
"Going forward, we believe that last week's slight sell off in crude has discounted today's expected unchanged stance," said Man Energy analyst Edward Meir. "The market could strengthen slightly once the meeting is over, focusing instead on the increased likelihood of a cut at the next meeting."
OPEC, which controls half of global crude exports, would normally favour a cut to supplies in the second quarter as demand eases but high oil prices, at $36 a barrel last month, would make any reduction difficult to justify to consumers. Prices have gained more than 20 percent since OPEC last announced a cut in production in September, and on Tuesday the cartel's reference basket of crudes was valued above its preferred $22-28 price band. A senior Algerian OPEC delegate said on Tuesday he thought there was a consensus within OPEC to leave output unchanged. "Yes, I think we have consensus," the delegate told reporters. Instead of cutting official output, the cartel is expected to urge members to stick to their quota limits. A survey last week estimated OPEC members, excluding Iraq, had been producing more than 1.75 million barrels per day over and above the official output ceiling to contain a winter price spike.//www.reuetrs.com