OPEC may cut output again if prices fall -Algeria

ALGIERS, Jan 17 (Reuters) - OPEC may consider reducing output again if oil prices fall, Algeria's energy and mines minister said on Saturday, adding that he expected a sharp decline in oil demand in the second quarter this year.

The minister, Chakib Khelil, said that prices would nevertheless stabilise in that quarter.

"Prices...would stabilise in the second quarter before they would increase in the third quarter," Khelil told reporters.

U.S. light crude oil CLc1 settled on Friday at around $36.5 per barrel, down more than $110 since July as the global economic downturn hit energy demand. Commenting on the market situation, Khelil said: "The demand for oil had declined. It is clear that it (demand) would fall sharply in the second quarter".

"If prices fall, we may consider the possibility of reducing again the production," he added in reference to OPEC.

On the issue of OPEC members' observance of cuts decided earlier, Khelil said: "All OPEC countries had implemented the decision". (Reporting by Hamid Ould Ahmed, Editing by Anthony Barker)