Saudi Arabia Seeks Oil Price of `Around $70,' IMF Says

By Matthew Brown

Oct. 20 (Bloomberg) -- Saudi Arabia and many of its Gulf neighbors believe $70 a barrel is a fair price for crude, the International Monetary Fund said as OPEC producers meet to discuss output quotas in Vienna later this week.

``For many of these countries, in particular Saudi Arabia, the view always was that a price of around $70 was the right price,'' Mohsin Khan, regional director of the IMF, said in an interview in Dubai today.

Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, needs to earn $49 from each barrel of oil it sells to balance its budget, the IMF said today in its economic outlook for the Middle East and Central Asia. The United Arab Emirates needs $23 a barrel, while Qatar needs $24 a barrel, it said.

OPEC, which meets Oct. 24 in Vienna, three weeks earlier than planned, is facing the weakest growth in demand since 1993 just as new fields come on line from Angola to the Gulf of Mexico. Members may cut daily output by as much as 2 million barrels, President Chakib Khelil said yesterday.

Crude oil rose 2.4 percent to $73.54 a barrel at 9:13 a.m. in New York on signs that OPEC may cut output to halt a 50 percent drop in prices since July.

Editors: Shaji Mathew, Jonas Bergman.

To contact the reporter on this story: Matthew Brown in Dubai at mbrown42@bloomberg.net