NEW YORK (Reuters) - Oil prices breached the $31 a barrel mark Wednesday as dealers fretted over winter stockpiles on the eve of an OPEC ministers' meeting in Vienna to review output policy.

Shortly before 3:00 p.m. ET, light crude for January delivery rose 30 cents to $31.08 a barrel on the New York Mercantile Exchange, while London Brent crude on the International Petroleum Exchange settled 20 cents higher at $29.14 a barrel.

OPEC, which controls 40 percent of world oil exports, is widely expected to hold current output quotas in place at its Thursday morning meeting, though members have signaled their intent to keep prices strong.

Stern output policy by the cartel could send petroleum prices soaring as the Northern Hemisphere enters its high-demand winter season.

OPEC kingpin Saudi Arabia refused Wednesday to rule out a decision to cut the cartel's output quotas Thursday, and added high prices are justified due to a slump in the U.S. dollar on currency markets.

"There is concern for next year's second quarter and some proactive action needs to be taken, whether at this meeting or the meeting before the March meeting," Saudi Oil Minister Ali al-Naimi said.

Cartel members Libya and Indonesia said the group is likely to meet again in January. OPEC has been wary that an increase in output from non-OPEC nations as well as Iraq could cause a price slump in 2004.

The pre-OPEC jitters were supported by a U.S. government report Wednesday claiming the world's largest energy consumer may have trouble meeting its fuel demand this winter heating season.

"Without a substantial increase in crude oil imports sometime in the next several weeks, it may be difficult to supply enough products for current demand, while continuing to rebuild inventories, both for crude oil and major refined products," the U.S. Energy Information Administration said in its weekly review of the oil market.

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U.S. crude oil imports in the last two weeks have averaged just over 9.1 million barrels per day (bpd) as fuel suppliers struggle to buffer stockpiles, compared with about 10 million bpd during the preceding weeks, EIA said.

U.S. oil inventories, meanwhile, have declined by 9.7 million barrels over the last weeks to meet demand for refined products, including a 4.8 million barrel drop last week.

Tempering the supply worries, inventories of gasoline and distillates, including heating oil, increased last week as refiners boosted their run rates.

Gasoline supplies increased by 3.4 million barrels, while distillate supplies rose by 2.8 million barrels, the EIA said.  

-- from staff and wire reports