WASHINGTON: US Energy Secretary Steven Chu wants OPEC to carry out an oil production policy that will help keep oil and gasoline prices stable “as much as possible.”

“Sudden drops and sudden rises (in oil and gasoline prices) hurt everybody equally, and it’s that stability that we seek,” Chu told Reuters in an interview on Friday as he prepares to leave for Rome this weekend to meet with energy ministers from the Group of Eight (G-8) industrialized countries

Chu noted that US oil and gasoline prices “have gone up a bit” in recent weeks, with crude rising $10 a barrel and gasoline jumping 23 cents a gallon since the beginning of the month.

“Another price spike would be bad for the economy and they (OPEC members) know it,” he said.

Chu’s statement came as a senior official of the International Energy Agency (IEA) warned of “significantly higher” prices for oil in the wake of companies cutting investment in the new production needed to match demand from fast-growing China and India.

IEA chief economist Fatih Birol told The Associated Press that oil companies have canceled at least $170 billion of planned investments — including $100 billion this year — as they seek to save money amid the financial and economic crisis. That’s equivalent to 2 million barrels of oil per day, and a further 4.2 million barrels per day of future oil-supply has been delayed by at least 18 months, he said. Oil companies are likely to announce even more cutbacks in oil and gas production investments in coming months, he said.

“If there is a rebound in demand with a reduction of investments on the supply side, we may have difficulties” with oil prices “significantly higher than today” in coming years, he said.

“It’s bad news for the economy which is still very, very fragile.”

Oil prices, buoyed by hopes that the worst of the recession is over in the US, the world’s biggest oil consumer, held above $61 a barrel on Friday, down from $147 in July.

Birol declined to give an estimate of how high he expects prices to go, but he said oil supply could tighten quickly when the global economy starts to recover and demand strengthens.

The IEA’s outlook is part of a report to be delivered today to G-8 energy ministers in Rome and to G-8 leaders at their July summit.

The Paris-based agency report also predicts that global electricity consumption will fall this year for the first time since records began in 1945, highlighting the depth of the current recession.

“If you want to measure the health of an economy, you look at the electricity consumption,” Birol said.

“In the last 65 years we had so many things: We had the first oil price shock, the second oil price shock, Asian financial crisis, US recession — electricity has never ever gone down. In 2009 for the first time it will go down. It shows how serious the recession is.”

The IEA forecasts global electricity demand will fall by 3.5 percent in 2009, he said.