Oil investment falls by $170 bln

PARIS: Oil producers have cancelled or delayed 170 billion dollars' worth of investment in recent months, the IEA said in comments published Monday, underlining the impact of the economic crisis.

Falling oil prices, tight credit markets and slumping demand have stunted investment, the International Energy Agency's chief economist Fatih Birol was quoted as saying by France's specialist Petrol Industry Bulletin.

"In recent months, petrol groups have cancelled or postponed about 170 billion dollars (122 billion euros) in investment," he said, adding that the cancelled and postponed projects cut production by 6.2 million barrels per day.

Daily world oil production is about 83 million barrels per day, according to the IEA, which has also predicted demand will drop by three percent this year, the sharpest fall since 1981.

Birol said oil investment was hit hardest in North America and the North Sea, while the Middle East was relatively spared since production costs are lower there.