OPEC delegates welcome oil price fall

Oil’s sharp slide this week is welcome because high prices may hurt the world economy and in the longer term accelerate the use of alternative fuels, OPEC delegates said on Friday.

Oil fell below $109 a barrel on Friday, extending a record rout in the previous session, which wiped as much as 10 percent from the price, on concern about the strength of global economic recovery.

“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 an OPEC delegate, who declined to be identified by name. “A price in the range of $90 to $100 will be ideal.”

Oil’s drop was prompted in part by the death of al Qaeda leader Osama bin Laden, the delegate said, rather than anyfundamental change in supply and demand for oil. A second OPEC delegate made similar remarks.

“High prices will affect demand and encourage the trend towards renewables,” the second delegate said. “The price is more affected by geopolitics. It was not fundamentals.”

The two delegates were speaking for a country in the moderate Gulf core of the 12-member Organisation of the Petroleum Exporting Countries and one of its four African members. No-one at OPEC’s Vienna headquarters was available for any official comment on the oil market on Friday.