UPDATE 2-U.S. energy secy worried OPEC may hurt the economy

(changes headline, adds background on OPEC output cuts, EIA economic forecast)

By Tom Doggett

WASHINGTON, March 11 (Reuters) - U.S. Energy Secretary Steven Chu said on Wednesday he will speak to OPEC ministers before their meeting this weekend and warn them as they consider another oil production cut that high crude prices will harm the fragile world economy.

OPEC members meet in Vienna on Sunday to discuss whether to lower oil output, which analysts believe will put upward pressure on world crude prices and U.S. gasoline costs.

"I certainly intend to say that price volatility of oil doesn't do anyone any good and I will urge OPEC to be as transparent as possible in the way they deal with the issue." Chu told reporters on Capitol Hill after a Senate committee hearing on the Energy Department's budget.

"I agree that if the cost of petroleum increases that will create a huge strain on the ability of the world economy to recover and I will certainly make my concerns known regarding that," he said.

OPEC previously agreed to slash production by some 4.2 million barrels per day to try to keep crude prices from falling. The price of oil has sunk from $147 last summer to below $40 a barrel as the weak economy slashed petroleum demand.

PFC Energy, a Washington-based consulting group, said Saudi Arabia, the leading OPEC member, has stressed to other members that they need to improve compliance with existing output cuts, indicating some countries may be cheating on quotas.

OPEC is considering an additional production cut to be ready for an expected decline in global oil demand, PFC Energy said.