UPDATE 1-OPEC output cut decision likely in March-Khelil

(Adds Khelil comments, background)

ALGIERS, Feb 22 (Reuters) - OPEC is very likely to decide on a new production cut at its next meeting scheduled in March, Algerian Energy and Mines Minister Chakib Khelil said on Sunday.

"It is very likely that OPEC will take a decision on March 15 to further reduce output and help stabilize prices, which are falling," Algerian state news agency APS cited Khelil as saying.

The decision whether to cut output would be up to OPEC, he said, but added: "I think that if prices fall and that the trend is clearly downward, then OPEC would be obliged to cut production again."

Khelil was speaking in the Algerian capital after a gas contract signing ceremony.

Oil prices dropped on Friday as a deteriorating global economic outlook continued to weigh on the market. Crude prices have fallen more than $100 a barrel from peaks reached last July as the worsening economic crisis curbed oil demand.

Several OPEC members have signaled that the cartel could deepen its cuts when it next meets on March 15 in Vienna.

"If OPEC had not decided on cuts in September, October and December, we would not be at $40 per barrel, but probably at $20," APS quoted Khelil as saying.

He warned that very low prices could lead to a fall in energy sector investment in the short term, which could tighten supply just when demand is expected to pick up again in the next two to three years.