Mexico will reject pressure from Saudi Arabia to join the Organisation of Petroleum Exporting Countries (OPEC) in reducing its output at tomorrow's meeting of the cartel in Vienna.
Mr Ali Naimi, Saudi Arabia's Minister for Energy, and Mr Felipe Calderon, his Mexican counterpart, were expected to meet in Vienna late last night or this morning.
Mexico is concerned that it could risk reprisal by the US, its largest customer, if it cuts its production while prices remain high.
"Our position is they [OPEC] have said a lot, but implemented little," said a Mexican source. He added that Mexico, which is not a member of OPEC, had co-operated with OPEC in the past five years, although not on the last two occasions that the cartel said it would cut output.
Saudi Arabia and other OPEC members fear a drop in demand for heating oil in the west as spring progresses.
Saudi Arabia, the world's biggest exporter, is trying to keep inventories held by companies in consuming countries as low as possible.
It is a policy that in the past year has narrowed the gap between supply and demand, strengthening OPEC's grip on the market.
Hedge funds and other institutional traders of oil have already begun to liquidate their long positions.
However, fearing that high petrol prices this summer could become a political liability ahead of the November presidential elections, the Bush administration has been requesting producing countries not to reduce supplies.
