Oil to Fall Below $100, May Trigger OPEC Cut, Alfa Bank Says

By Grant Smith

Aug. 15 (Bloomberg) -- Crude oil will probably fall below $100 a barrel within weeks, nearing the $90 threshold that would trigger a production cut by OPEC, according to Alfa Bank.

Oil has tumbled 23 percent from the record $147.27 a barrel reached on July 11 as a stronger dollar diminishes the appeal of commodities as an inflation hedge. The U.S. currency will likely continue to recover, prompting crude to drop below $100 and a potential output decrease by OPEC, which meets next month.

``OPEC will likely defend $90 a barrel or higher,'' Alfa analysts led by Ronald Smith in Moscow said in an e-mailed report today. ``OPEC will remain firmly in control of the oil market for at least the next decade.''

The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world's oil, is due to meet in Vienna on Sept. 9 to review production targets. The group has no official level at which it would stabilize prices by cutting output.

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