LONDON -- Oil prices struggled to hold on to highs touched on Tuesday despite mounting consensus that OPEC will agree to substantially slash output when it meets today.

U.S. light crude Futures hovered around $30 a barrel shortly after Tuesday's opening, to stand 11 cents up at $30.16.

New York dampened London Brent Futures' early ardor, the February contract standing around two cents lower at $26.16 a barrel after touching a new month high of $26.50 earlier in the day.

Prices dipped on profit-taking ahead of OPEC's meeting after leading producer Saudi Arabia earlier expressed confidence that the cartel enact a 1.5 million barrels per day (bpd) cut prompting a high of $30.61 a barrel.

Oil prices have rallied in recent weeks as confidence mounted that OPEC producers would slice crude supplies to thirsty Western customers at the meeting in Vienna.

Saudi Oil Minister Ali al-Naimi fanned the market's flames on Tuesday when he said he expected OPEC to endorse a production cut of 1.5 million bpd, which would take into account exports from maverick producer Iraq.

Naimi said OPEC was determined to defend its $25 target for a basket of crudes that was priced on Monday at $24.62.

"We expect a pro-rata reduction of 1.5 million barrels a day from February," he told reporters.

"We saw the supply-demand data and we decided we had to make a reduction. Had we carried on with output at this level we would have flooded the market," he said.

Price hawk Kuwait said on Tuesday it expects OPEC to swiftly finalize an agreement to cut crude output by 1.5 million bpd.

Asked to confirm the pact would be for 1.5 million bpd, Oil Minister Sheikh Saud Nasser al-Sabah said: "That is what I have been told."

OPEC heavyweight Saudi Arabia has been pushing for a cut of this size for several weeks and most other cartel members have said a reduction of 1.5 million to two million bpd is needed to shore up prices ahead of waning Northern Hemisphere winter demand.

OPEC Ignores U.S. Pleas

OPEC appears to have shrugged off pleas from the outgoing U.S. Energy Secretary Bill Richardson not to slice supplies.

The world's biggest energy-consumer is anxious about the impact of an oil price hike on a fragile American economy and Richardson has conducted a last-minute whirlwind tour to convince OPEC producers to keep the oil taps turned on.

"My trip has been a success. I believe there will not be a cut of the magnitude of two to three million barrels per day," Richardson told reporters in London after his final talks.

But Algeria's Energy and Mining Minister Chakib Khelil, who is the OPEC president, disagreed that a cut would fuel inflation.

"The market has integrated the expected production cut into the price, so we will not see major price changes after the decision," he said. "We don't see oil having a tremendous impact on inflation."

OPEC has decided to take a pragmatic approach to the thorny issue of how to judge unpredictable export levels from Iraq. Baghdad's United Nations-monitored sales have been running low in recent weeks but the cartel is assuming a return to full capacity soon.

"1.5 million barrels per day was not a figure out of the blue -- we took a lot of variables into account including the return, or lack of return, of Iraqi oil," Naimi told reporters.

(Reuter)