Oct. 23 (Bloomberg) -- Crude oil rose from a 16-month low as OPEC's president said that members had reached a consensus on the need to trim production and Iran said the cut may be as much as 2 million barrels a day.

There's no agreement on how big the reduction needs to be, the group's president, Chakib Khelil, told reporters in Vienna, where OPEC ministers arrived before a meeting tomorrow. Iranian Oil Minister Gholamhossein Nozari said OPEC must ``balance'' the market, after prices tumbled 54 percent from a record in July.

``If OPEC makes a cut of 1 to 2 million barrels tomorrow, prices should firm up and move higher in the short term,'' said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut. ``Unless there is something huge announced, the market will eventually start moving lower again because of the weak economy.''

Crude oil for December delivery rose $1.09, or 1.6 percent, to settle at $67.84 a barrel at 2:42 p.m. on the New York Mercantile Exchange. Futures touched $65.90 early today, the lowest intraday price since June 13, 2007. Prices are down 20 percent from a year ago.

Gasoline for November delivery increased 0.69 cent, or 0.4 percent, to settle at $1.5778 a gallon in New York.

``Prices have fallen a great deal, so a gain should be expected,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``I think we are in a bear market where every rally will be followed by a move to a new low.''

Stocks Fall

Oil retreated from the day's high after U.S. stocks moved lower. Financial and consumer shares led the stock market retreat, after home foreclosures surged to a record and a lower- than-projected sales forecast at Amazon.com Inc. dimmed the earnings outlook for retailers.

Oil prices dipped to the low today after Saudi Arabian Oil Minister Ali al-Naimi declined to express his support for a possible cut, on his arrival in Vienna. Saudi Arabia and Iran are the two biggest producers in the Organization of Petroleum Exporting Countries.

``Who said anything about a cut?'' al-Naimi said when asked whether he supports the possibility of the group agreeing to reduce output when it meets tomorrow. ``Prices will be determined by the market.''

OPEC needs to lower production to restore equilibrium after the exit of speculators from the market hastened oil's drop from July's record, said Khelil, who is also Algeria's oil minister.

The group, whose members supply more than 40 percent of the world's oil, has asked Russia and other non-OPEC suppliers to trim output, he said. He wasn't confident Russia would respond, he added.

Saudi Importance

``If the Saudis don't play ball, it doesn't matter what OPEC decides,'' said Christopher Edmonds, the managing principal of FIG Partners Energy Research & Capital Group in Atlanta. ``Without Saudi support and compliance with a production cut, the cartel doesn't even need to meet. It will have an immaterial impact on production and price.''

The group needs to avoid a buildup in crude inventories that could cause a collapse in oil prices next year, Edmonds said. OPEC should evaluate whether a further cut is needed when it meets in Algeria in December, Venezuelan Oil Minister Rafael Ramirez said today.

The United Arab Emirates, OPEC's third-biggest producer, is ``very concerned about the steep decline'' in prices, Oil Minister Mohamed al-Hamli said.

Parsing Words

``We are going to parse the statement they make tomorrow,'' said Kyle Cooper, an analyst at IAF Advisors in Houston. ``The tone of the statement may be more important than the amount they actually cut.''

Tomorrow's OPEC meeting in Vienna is scheduled to begin at 9 a.m. local time.

The last time OPEC lowered quotas was at a December 2006 meeting in Abuja, Nigeria. The 500,000 barrel-a-day cut took effect in February 2007, expanding an earlier reduction agreed to in October. The cuts were reversed later in 2007 as prices rose.

Brent crude oil for December settlement rose $1.40, or 2.2 percent, to settle at $65.92 a barrel on London's ICE Futures Europe exchange.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: October 23, 2008 15:40 EDT