Saudi Arabia said on Saturday that it still favored a $70-$80 range for oil, a restatement of a two-year-old policy that will relieve consumer nations worried that Riyadh might let oil prices get out of control and slow global economic recovery.

Asked by reporters in Quito what price range Saudi favored, Naimi said: $70-$80 is a good price.

He was speaking ahead of a Saturday meeting of the Organization of the Petroleum Exporting Countries which ministers said would leave production restraints in place, despite a recent surge in crude prices to $90 a barrel.

In early November Naimi appeared to raise the top end of his preferred price range to $90 when he said consumers were coping with a $70-$90 range.

U.S. crude closed at $87.79 a barrel on Friday have touched a two-year high of $90.76 earlier in the week.

Other ministers said they were content with current price levels. Most bullish was Venezuela but all others who commented said they were content with prices and saw no need to raise output.

We believe that the market should compensate high production costs. $100 would appear to be an adequate price, said Venezuelan Oil Minister Rafael Ramirez.

Iranian Oil minister Massoud Mirkazemi said global oil demand was not good and that nominal prices are good, real prices are not.

The comments will raise questions among oil traders about what conditions OPEC requires to lift supply.

Shokri Ghanem, chairman of Libya's National Oil Corporation, said fundamentals rather than price were paramount.

Once there is a shortage in the market, or once we feel there is a shortage in the market, we of course will increase production but it is not just a function of the price, Ghanem said.

With OPEC's next meeting not scheduled until June, markets may now test Saudi Arabia's resolve in keeping prices below $80.

Clearly prices too high will not help us in the long run, as we saw in 2008, said a Gulf OPEC delegate.

Oil hit a record $147 a barrel in 2008, hitting fuel demand just as economic recession undercut the market and sent crude to a low of under $34 a barrel.

OPEC agreed its biggest ever supply curbs at the end of 2008 and has not changed policy since.

Many in OPEC argue that inventories are sufficient and some say that speculators are to blame for pushing prices higher.

Inventories held among the industrialized nations of the OECD are high at 60 days of forward demand.

But the International Energy Agency, adviser to consumer nations on energy, said on Friday that world demand, bolstered by an early winter cold snap, is rising more quickly than expected.

Extra demand has flattened the oil futures price curve and reduced the discount for prompt crude, cutting the incentive for traders to store crude. That is likely to mean inventories start dropping.

(Additional reporting by Santiago Silva, Robert Campbell, Daniel Wallis, writing by Richard Mably, editing by Matthew Robinson)

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