OIL: Prospects for Price Cuts

His belt pinching after feasts of roast lamb and pilaf, his legs a bit wobbly after trying them at Arab dancing, William Simon left the Middle East last week feeling justifiably tired but optimistic. The Treasury Secretary's hectic ten-day, four-country barnstorming had ended on the upbeat. Not only will Saudi Arabia take steps that could reduce world petroleum prices but that country will probably also invest much of its swelling surplus of petrodollars in U.S. Government securities.

The "recycling" of the Saudi funds into special nonmarketable Treasury securities could greatly ease the strain on the U.S. balance of payments and decrease...

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