OPEC to cut production to avoid glut

OPEC, supplier of a third of the world’s oil, is planning to cut production from its highest level in 18 months to prevent a price slump as demand slows and Iraqi sales near a return to the market.

Saudi Arabia led OPEC’s output higher this year to avert shortages caused by outages in Venezuela and Nigeria and the war-related halt to Iraqi exports. Production is some two million barrels a day more than demand, OPEC ministers said last week.

Crude oil in New York has slid 24% from a 12-year high of $39.99 a barrel in February while the coalition deposed Saddam Hussein in Iraq and seized the country’s oil fields. Faced with a seasonal drop in use, the Organisation of Petroleum Exporting Countries meets Thursday to discuss how to prevent a glut.