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Oil watchdog says output declining faster than thought

LONDON - Output from the world's oil fields is declining at a faster rate than expected, a forthcoming study of the biggest fields by the International Energy Agency will warn, the Financial Times said Wednesday.

Next month's World Energy Outlook will say that without extra investment to raise production, the natural annual rate of output decline is 9.1 percent, the business daily reported citing a draft copy of the study.

The annual report by the IEA, the oil watchdog, predicts less demand for oil because of high prices and slower economic growth, but says the reduced output may offset this and leave the world struggling to meet demand.

The IEA expects oil consumption to reach 106.4 million barrels a day in 2030, down from last year's forecast of 116.3 million barrels a day.

But it warns there must be a ‘significant increase in future investments just to maintain the current level of production’, the FT reported.

About 360 billion dollars (230 billion pounds) must be invested each year until 2030 to meet demand in China, India and other developing countries, it says, but even with this, output will decline by 6.4 percent each year.

‘The future rate of decline in output from producing oilfields as they mature is the single most important determinant of the amount of new capacity that will need to be built globally to meet demand,’ the IEA said.