ABU DHABI (AFP) - The UAE said that it saw no need for OPEC to change its current production quota, but that next year's expected rise in Iraqi oil production would be a "crucial factor" in any future decision regarding quotas.

"Current conditions in the oil market do not call for taking any decision to change existing production quotas by OPEC ... but a final decision would be taken after the ministers' meeting in Vienna," Oil Minister Obeid bin Saif al-Nasseri said in a statement carried by the official WAM news agency.

Most analysts believe that the 11-nation Organization of Petroleum Exporting Countries (OPEC), which includes the United Arab Emirates, will extend its current production ceiling of 24.5 million barrels per day (bpd) when it meets in Vienna on Thursday following its surprise cut in production by 900,000 bpd on September 24.

But Nasseri said Iraq remains a wild card in the oil market with any increase in production by the war-torn country negatively impacting prices. He said OPEC would counter such an event by "taking a decision that would absorb the increase and lessen its negative impact on prices."

The director of Iraq's State Oil Marketing Organization Shamkhi Faraj told AFP last week that oil exports would rise to between two and 2.1 million bpd in March from their current level of 1.6 million bpd.

Nasseri was upbeat about oil prices saying they would be boosted by a 1.5 million bpd increase in demand in the first quarter of 2004 on the back of economic recovery in the United States, Japan and Europe.

"We are quite optimistic about price levels next year despite predictions for a fall in demand during some months due to seasonal factors," said Nasseri, adding that the expected rise in demand in early 2004 may require OPEC to call for an extraordinary meeting in January or February.

He said the possibility of such a meeting will be discussed in Vienna on Thursday.

The price of benchmark Brent North Sea crude oil for January delivery closed Friday at $28.88 a barrel in London from 29.65 dollars a week earlier. Analysts blamed the decline on a combination of profit-taking by investment funds and forecasts of warm seasonal weather in the United States.