IEA forecasts US to account for a third of new oil supplies The US will account for a third of new oil supplies over the next five years, more than previously expected, according to the International Energy Agency, illustrating the impact of the shale revolution. In its medium-term review of the oil market, the industrialised countries" energy watchdog sharply raised its forecast for North American oil production from six months ago and slightly cut its forecast for capacity additions from the Opec oil cartel. The new outlook, released on Tuesday, paints a mildly bearish picture for oil prices, as production will grow faster than demand, building a large cushion of spare capacity in the market. "North America has set off a supply shock that is sending ripples throughout the world," said Maria van der Hoeven, IEA executive director. The good news is that this is helping to ease a market that was relatively tight for several years. The outlook will influence businesses as diverse as major oil companies, including ExxonMobil and Royal Dutch Shell, big commodities traders such as Glencore and Vitol and top energy consumers, including airlines such as Delta and British Airways. Brent, the global oil benchmark, has traded above $100 a barrel for most of the last year and a half, triggering a bonanza for oil producers and a headache for consumers. Opec pocketed more than $1tn in net oil revenues last year. US oil production grew by more than 800,000 barrels a day last year, the biggest annual increase on record, thanks to rapid growth in output from shale oilfields such as the Bakken in North Dakota and Eagle Ford in Texas. The IEA expects North American crude output to grow by another 3.9m b/d by 2018, with US "tight oil," which includes production from shale, accounting for 2.3m b/d, and Canada's oil sands for 1.3m b/d. North America accounts for almost half of the 8.4m b/d increase the IEA anticipates in global liquids production, which includes biofuels and processing gains at refineries, over the next five years. Opec, led by Saudi Arabia, will remain a crucial source of oil over the next five years. But the IEA has sharply reduced its forecast for the so-called "call on Opec" - the amount members must pump to meet global demand - from its last medium-term report in October. North America has set off a supply shock that is sending ripples throughout the world Maria van der Hoeven, IEA executive director The Paris-based organisation expects the call on Opec to fall from more than 30m b/d last year to 29.2m b/d in 2015, as North American output rises much faster than global demand. The drop will force Opec to stop supplies from some fields, creating a cushion of spare capacity that could be called on during supply shocks, such as a war in the Middle East, or if demand accelerates because of faster economic growth in countries including China and India. Spare capacity in the global oil market is expected to top 7m b/d next year, up from as little as 1.5-3.0m b/d in the period between 2004 and 2008. But the IEA expects spare capacity to begin falling again by 2016, as US production growth slows and demand growth remains firm. At that point the IEA also expects the call on Opec to begin rising again, anticipating higher production from the members of the cartel. While production is growing strongly in North America, the IEA expects emerging markets to continue to drive growth in consumption. It forecasts non-OECD countries to account for the majority of oil demand by the end of 2013 for the first time and the majority of oil imports by 2018.