Iran, number two oil producer in OPEC, said on Friday that it will support a decision to cut production by the cartel at an extraordinary meeting in Cairo later this month to discuss falling oil prices.

`OPEC members have decided to hold a meeting on November 29 in Cairo to discuss recent prices. The current market situation is worrying,` the Mehr news agency quoted Iran`s cartel representative Mohammad Ali Khatibi as saying.

`In light of dwindling oil prices and instability in the market, Iran will support an oil production cut,` he added.

A spokesman for the Organisation of Petroleum Exporting Countries in Vienna confirmed the meeting would be held November 29 in Cairo, where the Organisation of Arab Petroleum Exporting Countries (OAPEC) is also due to gather.

Last month OPEC, which produces about 40 percent of the world`s crude oil, decided to cut output by 1.5 million barrels a day from November, after crude oil prices dived from record peaks above 147 dollars in July.

Khatibi said the decision `did not have much effect on the market.`

`If the current trend (decrease in prices) continues, the members will cut production in order to bring back stability to the market,` he added.

Amid rumours that OPEC may move to cut output soon, Libya`s Oil Minister Shukri Ghanem had told AFP on Thursday that the cartel would meet in the Egyptian capital on the sidelines of the OAPEC meeting.

`Since we are about 10 or nine... who are members of OAPEC, who are also members of OPEC, that happen to be in Cairo, so why not consult also on the market situation?` he added.

Meanwhile oil prices fell on Friday, a day after slumping close to 50 dollars, despite growing expectations that OPEC could cut output again later this month, traders in London said.

On the New York Mercantile Exchange (NYMEX), light sweet crude for December delivery fell 82 cents to 57.42 dollars a barrel, after hitting 54.67 dollars Thursday, levels last seen in January 2007.

Brent North Sea crude for January fell 99 cents to 55.25 dollars on London`s InterContinental Exchange (ICE).

The Brent December contract expired Thursday at 51.99 dollars after hitting 50.60 dollars -- the lowest level since May 2005.

Crude oil prices have collapsed by about two-thirds since striking record peaks above 147 dollars in July on concern that a prolonged global recession could slam the brakes on energy demand.

Oil also traded slightly lower in Asia on Friday, with New York`s main futures contract, light sweet crude for delivery in December, falling 40 cents to 57.24 dollars a barrel.

OPEC has already scheduled an ordinary meeting for Oran, Algeria, on December 17 to review the 1.5 million barrels cut.

The cartel has made it clear it would consider another output reduction if oil continues to remain below 70 dollars a barrel.

The International Energy Agency (IEA) on Thursday slashed its 2009 oil price forecast to 80 dollars from 110 dollars, saying imminent recession was strangling demand in rich countries and crimping emerging economies.

The IEA made further big cuts to its estimates of global demand growth in its monthly report but said that despite recent heavy price falls to the 60-dollar range, prices on futures contracts still hovered around 85 dollars a barrel.

In the United States, the world`s biggest energy-consuming nation, the Department of Energy said that crude stockpiles were unchanged at 311.9 million barrels last week compared with the prior week.