Oil prices forecasted to spike as oil companies make huge cutbacks

Faith Birol said oil companies have canceled at least $170 billion of planned investments, including $100 billion in 2009 and are expected to announce further cuts in the coming months as the economic downturn pushes them to save money, he said.

If there is a shortage of supplies and demand for oil returns as the economy recovers, an increase in oil prices would be "significantly higher than today" Birol told AP.

Though he declined to detail the price of oil in the future, he predicted supplies would "quickly" tighten in better economic conditions.

Crude oil on Friday closed up 50 cents at $61.55 a barrel on the New York Mercantile Exchange. Prices were as high as $147 a barrel in July 2008.