Jan. 17 (Bloomberg) -- Crude oil rose after Iran said there is no need for the Organization of Petroleum Exporting Countries to increase supply at its Feb. 1 meeting.

OPEC's second-largest producer said the exporting group doesn't need to produce more oil, especially after the recent price decline, Oil Minister Gholamhossein Nozari was quoted as saying today by the ministry's official news service, Shana.

``Rather than raising output at the next meeting, I think OPEC will start to trim back actual production in March or April, though without a formal cut in quotas,'' said Mike Wittner, head of oil research at Societe Generale in London.

Crude oil for February delivery rose as much as $1.11, or 1.2 percent, to $91.95 a barrel in electronic trading on the New York Mercantile Exchange. It was at $91.64 at 1:38 p.m. in London.

The contract fell 1.2 percent to $90.84 a barrel yesterday, the lowest close since Dec. 18. New York futures reached a record $100.09 a barrel on Jan. 3. Oil is up 75 percent from a year ago.

U.S. Energy Secretary Samuel Bodman, touring the Middle East, called on OPEC countries to keep oil markets supplied on concern high energy costs will hurt economic growth.

Brent crude for March settlement traded at $90.34, up 84 cents, on London's ICE Futures Europe exchange at 1:38 p.m. in London. It fell $1.32, or 1.5 percent, to $89.50 yesterday.

``We have a very precarious balance between global oil demand and supply,'' said Christopher Edmonds, the managing principal of FIG Partners Energy Research & Capital Group in Atlanta. ``The fair price at least for the first six months of the year'' is between ``$90 and $95,'' Edmonds said.

Stockpile Surge

Oil fell after yesterday's Department of Energy report showed U.S. oil inventories surged 4.26 million barrels to 287.1 million in the week ending Jan. 11, the first increase in nine weeks and more than twice the gain forecast by analysts in a Bloomberg News survey.

``We see a slowdown in the U.S., and this is a problem for commodities heavily used in industrial production such as base metals and oil,'' said Tobias Merath, a commodities analyst at Credit Suisse Group in Zurich. ``We're cautious on prices in the first half of the year.''

Refineries operated at 87.1 percent of capacity, down 4.2 percentage points from the week before. Implied fuel demand averaged 20.4 million barrels a day last week, down 3.9 percent from a week earlier, according to the department.

The International Energy Agency lowered its estimate for first-quarter global demand growth in its monthly report yesterday. Demand will total 88.2 million barrels in the first quarter of this year, 100,000 barrels a day less than forecast last month.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

Last Updated: January 17, 2008 08:40 EST