Seeking to keep prices up without having them explode, OPEC agreed yesterday to reduce its daily oil output by 1 million barrels a day — and reserved the right to cut deeper...

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CAIRO, Egypt — Seeking to keep prices up without having them explode, OPEC agreed yesterday to reduce its daily oil output by 1 million barrels a day — and reserved the right to cut deeper early next year if crude turns much cheaper than now.

But traders said they were taking a wait-and-see attitude toward the pact, and sent oil prices sharply lower.

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The move by the Organization of Petroleum Exporting Countries is intended to prevent further revenue losses amid falling prices, without creating the kind of volatility that rocketed prices up to record highs earlier this year — forcing producers to scramble to meet demand.

Saudi Oil Minister Ali Naimi said the cut will be implemented starting Jan. 1.

If effective, the reduction would scale back output to 27 million barrels a day, the official production ceiling that OPEC has been exceeding for months because of the high demand.

Benchmark U.S. crude futures have fallen by almost a quarter since the record prices of more than $55 a barrel in October, as consuming nations have called on OPEC to keep output high to underpin economic recovery. The drop has been sharpest in the past week or so, spurred by increases in U.S. petroleum inventories, mild weather and little sign of a slowdown in OPEC output.

In trading yesterday, benchmark light, sweet crude oil futures for January dropped $1.82 to $40.71 a barrel on the New York Mercantile Exchange. In London, Brent crude oil for January fell $2.29 to $37.38 a barrel on the International Petroleum Exchange.