Oil prices down $ 5 as plunge deepens

Reuters: The deep sell-off on oil markets this week is welcome because prices above $ 120 a barrel were too high and crude at $ 90 to $ 100 is ideal, an OPEC delegate said on Friday.

Oil prices fell towards $ 107 a barrel on Friday, extending losses from a record rout in the previous session that wiped as much as 10 per cent from the price.

“The price had been going too high, to $ 120 a barrel, which is not good for consumers because it can affect the world economy,” said the delegate, who declined to be identified by name. “A price in the range of $ 90 to $ 100 will be ideal.”

The delegate said the drop in prices had been prompted in part by the death of al Qaeda leader Osama bin Laden. The Organisation of the Petroleum Exporting Countries was unlikely to raise its formal output target when it meets in June because there is no shortage of supplies, the delegate added.

“I do not think we’re prepared to change the quota at the moment due to the geopolitical uncertainty.”