In the face of declining oil demand, world oil prices have resumed their downward course, and threaten to move even lower.

With other sources of energy more readily available, this is as it should be, and no one recognizes the handwriting on the wall better than the OPEC cartel, which has scheduled yet another of its famous meetings, this time in Vienna on July 5.

There, the oil ministers of the Organization of Petroleum Exporting Countries will resume their private and public fighting over shares of the declining oil market. Many of the OPEC nations have been cheating on the last "official" OPEC price list, and Saudi Sheik Yamani has been warning that his country, too, will start discounting if the others don't quit the practice.

But OPEC is fighting a losing battle. Petroleum Intelligence Weekly, a highly regarded industry newsletter, observed last week that the falloff in oil demand has been greater than expected because coal, natural gas and nuclear power are more and more pushing oil out of the picture for power generation and in heavy industry.

Harry Neustein, a veteran international oil trader, said in an interview on his way to Vienna: "Those international oil companies who paid a high price (through mergers and acquisitions) for oil in the ground are in trouble." Neustein says that the "real" price of oil today is only $23-$24 a barrel, compared with the $28-per-barrel benchmark price.

What can OPEC do? Very little, says Neustein: "It's wishful (of them) to think they can sell more and get a higher price. Reality is here. Will they face it?"

In the six major world markets -- the United States, Japan, West Germany, France, Italy and Britain, which account for 60 percent of total oil demand -- oil consumption in April lost 1 million barrels a day to other sources of energy, or four times the decline expected for the quarter as a whole.

To Washington consultant Lawrence Goldmuntz, these figures are no surprise. Coal -- which can now be burned cleanly, he says -- is proving to be cheaper for industrial users, such as food-processing plants, despite the high initial cost of new installations. He figures that coal can be burned at the equivalent of about one-fourth the cost of oil: coal, at $24 a ton, provides the heat equivalent of about 4 barrels of oil.

The London-based American Express international economics unit -- another careful observer of oil market trends -- says that "continued oil-market weakness again raises the possibility of a major oil-price fall." Not only have the high prices set by OPEC cut demand, turning consuming industries to other fuels, but OPEC has had to cut its own output to sustain its artificial prices. Thus, the Saudis are reported to be down to production of only 2.5 million barrels a day. (Their heyday peak was over 10 million barrels a day.) That, believe it or not, pushes the Saudi output below Britain's, now around 2.7 million barrels a day.

The combined impact of energy conservation and substitution by other energy sources on OPEC is shown dramatically in a "lost sales" compilation made by the Amex economics unit. This measures the difference between actual OPEC output and what it would have been if oil output had kept pace with world economic growth.

On that basis, OPEC's "lost sales" from 1980 through 1984 were about 22 billion barrels, the huge part of it due to falling demand. This was a much more severe impact than took place in 1974-79, when "lost sales" were about 9 billion barrels. In the earlier period, OPEC's share of the market fell only modestly, from 53 to 47 percent of the market. By 1984, the OPEC share was down to 30 percent.

What are the consequences of a further oil- price drop to the $20-a-barrel area, sometimes viewed with trepidation in financial markets? The Amex Review says forthrightly: "A fall in oil prices could help give the world recovery its 'second wind', and help ward off any rising inflation expectations."

To be sure, it would not be good news for oil producers, especially those carrying a heavy foreign debt, although lower interest rates would offset some of the damage. There is also a risk, the economists say, that a dramatic "free fall" in oil prices would take the edge off conservation and make energy substitutes more expensive, triggering a third "oil shock" somewhere down the road.

But on balance, the prospective decline in oil prices is healthy for the world economy. The trend is likely to be reinforced by new discoveries, such as the additional 1 billion barrels in reserves recently uncovered in Colombia by the Occidental Petroleum Co. -- a find that may extend as well into Ecuador and Venezuela

"Although God was good to Islam, he didn't put all the oil within 300 miles of Mecca," says Goldmuntz.