The Organization of Petroleum Exporting Countries says world demand for oil is shrinking as developed countries slide further into recession.
In its December report, OPEC predicts oil demand will fall an average 1.3 million barrels per day in the first half of 2009.
OPEC says China, the Middle East, and other Asia nations will help boost demand.
The price of oil for future delivery rose above $46 in New York Tuesday, bolstered by expectations that the world's biggest oil producers could slash supplies this week to stop falling prices linked to shrinking demand.
Venezuela's oil minister, Rafael Ramirez, confirmed Tuesday that OPEC is ready to make a significant cut in oil supplies when it meets in Algeria on Wednesday.
Oil ministers from the 13-member cartel are expected to slash production by one million to two million barrels a day.
Oil prices fell to a four-year low of $40.50 on December 5, down from its July record of more than $147 a barrel.
OPEC is also lobbying non-OPEC oil producers such as Russia to cut supplies. Russia is sending a delegation to Algeria Wednesday and has said it might consider joining the cartel.
Some information for this report was provided by AFP, AP and Reuters.