OPEC Makes a High-Stakes Bet

Gambling that a small cut in production will stabilize prices

It was an unprecedented action by the Organization of Petroleum Exporting Countries. It might also prove too timid to achieve its goal.

With a worldwide oil glut estimated to exceed 5 billion bbl. of crude, OPEC is making its first attempt ever to firm up prices by reducing production. But the 13 members voted to curtail output by only 9.6%, or some 700,000 bbl. per day.

Oil markets were not giving any clear indication last week about whether the cut would firm up prices. The cost of competing North Sea oil on the spot...

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