LONDON, Feb 17 - Oil prices held firm on Tuesday as traders predicted OPEC would take some action to limit output even if it was failing to enforce last week's promise to stop leakage above the cartel's official ceiling. London Brent crude was trading 18 cents stronger at $30.50. U.S. light sweet crude slipped lower in electronic trade, falling 16 cents to $34.40 a barrel. But traders said the U.S. contract was catching up with modest losses on the London market on Monday when the U.S. exchange closed for Presidents' Day and as speculative funds readied for contract expiry later this week. The Organisation of the Petroleum Exporting Countries pledged at a meeting in Algiers last week to cut official supply limits by one million barrels per day to 23.5 million bpd from April to counter a seasonal second quarter decline in fuel demand after the northern winter. OPEC, which controls half the world's oil exports, also said it would act immediately to cut about 1.5 million barrels per day (bpd) in output by its members above self-imposed limits.
In the absence of other news, traders and analysts said OPEC was still the main market focus. They said they didn't believe OPEC would cut by as much as it had promised, but that the cartel would limit production. "If prices fall, they are likely to cut," said Steve Turner of Commerzbank. "That's a fairly powerful motivation for prices to prices to stay roughly where they are now." Oil producers typically must give customers about 20 days notice of monthly supplies. March volumes are now being set and there is no sign yet that OPEC is stopping over-production above its official ceiling. Trade sources have said OPEC producers Saudi Arabia, Nigeria, Iran and Kuwait and the United Arab Emirates are expected to keep supplies to key customers steady for March compared with February. But OPEC officials have said they will act to ward off any price collapse. The Qatari oil minister on Tuesday said OPEC would for now stand by its decision to cut production by one million barrels from April 1. "So far we have a decision to cut," Abdullah al-Attiyah told on the sidelines of a business seminar. "We have to wait and see when we meet in the end of March...but the decision is in place so far, there is no change." On Monday, OPEC President Purnomo Yusgiantoro said that if there were still fears of a surplus at the producer group's next meeting on March 31, it might make another cut to output limits in addition to the planned reduction from April 1. Nigeria's top oil official said last week that OPEC might not activate the April 1 cuts if its reference crude price stays at the top of OPEC's $22-28 a barrel range.//