By Susanna Loof
The Associated Press

VIENNA, Austria - With fuel costs already at uncomfortable levels for consumers, OPEC took a step that could push prices even higher by announcing Wednesday that it would cut its crude oil production target by 4 percent.

The Organization of Petroleum Exporting Countries hopes the cut, which takes effect today, will prevent a slide in prices this spring, when the global demand for oil usually slips to a seasonal low.

Some analysts said the cut could soon push crude prices above the psychologically important threshold of $40 a barrel. The decision could also worsen the pain for U.S. motorists, who have been paying the highest prices in recent years for gasoline.

OPEC, which pumps about a third of the world's oil, agreed in talks at its headquarters in Vienna to reduce its output target by 1 million barrels per day.

OPEC had to balance concerns that high prices could choke off economic growth with its own fears that swelling inventories and a seasonal lull in springtime demand could reduce cause prices to plunge.

OPEC ministers blamed speculators for much of the froth in prices and argued that the weak U.S. dollar was adding to the problem. Oil is bought and sold in dollars, and the recent decline in the dollar's value has caused the nominal price for oil to increase.

Futures markets, which rose sharply Tuesday on signals that OPEC would lower its output ceiling, responded to the official announcement with a sell-off as traders liquidated their long contracts and took profits.

U.S. crude futures for May delivery fell 49 cents to $35.76 a barrel in New York, while May contracts of North Sea Brent settled 77 cents lower at $31.51 in London.

However, some analysts argued that prices would soon begin to rise again, especially if OPEC showed that it was determined to curtail its actual output and not just reduce its production target. U.S. crude could spike to $40 a barrel "within a week or two," Larry said.

U.S. gasoline prices would stay high and might rise even higher, said Kevin Norrish, head of commodities research at Barclays Capital in London. The main problem wasn't expensive crude so much as limited refinery capacity. "They're not able to process the crude oil into gasoline quickly enough," he said.

Gasoline prices climbed to a nominal record average of $1.80 a gallon nationwide, according to the latest Lundberg survey.