OPEC needs unity quickly to stem oil's slump

By Peg Mackey and Alex Lawler - Analysis

LONDON (Reuters) - Oil's fall further below Saudi Arabia's "fair price" of $75 a barrel will increase pressure on OPEC to set aside any differences and cut supply further when it meets later this month.

The market slid nearly $5 to below $50 a barrel on Monday after OPEC at the weekend deferred a decision amid signs that Riyadh and its Gulf neighbours wanted tighter compliance, especially from Iran and Venezuela, to curbs already in place.

Some members, including Iran and Venezuela, are pushing for a deeper cut when the Organisation of the Petroleum Exporting Countries, which pumps 40 percent of the world's oil, meets on December 17 in Oran, Algeria.

Saudi Oil Minister Ali al-Naimi, speaking for OPEC's top exporter, has yet to publicly back another output cut, leaving traders uncertain about Saudi oil policy.

"There's no doubt OPEC needs to take more oil off the market in Oran," said Raja Kiwan, analyst at PFC Energy.

"If Naimi wants to play hard ball with Iran and Venezuela by letting the price fall and stocks build -- King Abdullah's comments have limited his flexibility."

Saudi King Abdullah announced the $75 price in an interview with a Kuwaiti newspaper published on Saturday.

Other OPEC members such as Nigeria and Kuwait are supporting the Saudi view that $75 is fair to both producers and consumers.