By Sylvia Westall and Karin Strohecker
VIENNA (Reuters) - OPEC ministers in Vienna this weekend will debate whether the best policy is strict compliance with existing output curbs or a new set of cuts as they balance the issues of bulging oil stocks and a bruised world economy.
Ministers arriving ahead of Sunday's talks have said the first item on the agenda was tighter enforcement of agreements since September to lower supply targets by 4.2 million barrels per day (bpd).
"Compliance is very good," Saudi Arabian Oil Minister Ali al-Naimi told reporters. "We'd like to see compliance as high as possible. It is over 80 percent now, it can be better."
Naimi said the output cuts were proving effective in reducing oversupply, but demand was expected to stay weak.
"Inventories are coming down and will come down in due time," he said.
"You have to understand that the world economy is not as healthy as it should be. We should expect demand world-wide to be down."
Sources have said some members of the 12-member producers' club would favor more decisive action than just complying with existing output curbs.
But the ministers who have so far spoken in Vienna have focused on compliance.
"First we have to check the commitment, then we can discuss what we should do in the future," Qatari Oil Minister Abdullah al-Attiyah said.
Whatever the outcome of Sunday's meeting, Saudi Arabia, the world's leading exporter and the best-placed to add or subtract barrels of oil could decide unilaterally how much it thinks the market needs.
Independent observers have said Saudi Arabia is already pumping less than its implied target.
HISTORIC CUTS
The cuts since last September are the deepest and most rapid yet and the rate of compliance is historically high.
They have helped to pull prices up from a low of $32.40 in December to around $46 now for U.S. crude -- a level that is just over $100 below last year's record high.
But inventories are still brimming and weak demand, especially heading into the second quarter when fuel consumption is typically at its lowest after the end of the northern hemisphere winter, could lead to further stock builds.
OPEC will be mindful of the price crash in the late 1990s when oil fell toward $10 a barrel.
Output cuts then were implemented more slowly than this time round and prices did not stabilize for more than a year.
A difference between then and now is that fuel demand was only flat. This time it is predicted to decline by at least one million bpd in 2009 compared with 2008 and the world economy is far weaker.
Another difference is that non-OPEC supplies are falling because of under-investment and the maturity of many oilfields.
That means any cooperation from non-OPEC countries with OPEC output cuts would be largely academic.
Some OPEC ministers have nevertheless called on the leading non-OPEC producer Russia to join in.
Moscow is sending a high-level delegation, including Deputy Prime Minister Igor Sechin and Energy Minister Sergei Shmatko, to attend Sunday's meeting as an observer.
(Additional reporting by David Sheppard, Henrique Almeida, Alex Lawler and Simon Webb, Writing by Barbara Lewis; editing by William Hardy)
