Demand for oil will outpace supply

NEW YORK (CNNMoney) -- New sources of oil and natural gas -- much of it from the United States and the rest of the Americas -- will expand supply over the next five years, but growth in demand -- particularly from China -- will outpace it, according to an industry report issued Thursday.

The International Energy Agency (IEA) projects that growth in oil supply capacity could average 1.1 million barrels per day between now and 2016 "as higher prices unlock new supplies."

The IEA said conventional crude oil makes up less than 40% of the increase in new supply, with the majority coming from natural gas liquids, biofuels and unconventional oil. Much of the new natural gas will be coming from the United States, one of the world's largest producers.

Fresh oil supplies will emerge from several Western Hemisphere nations, including Brazil, Canada and Colombia. Others mentioned in the report were Iraq, the United Arab Emirates, Angola and Kazakhstan.

But the agency also projects that growth in demand will outpace growth in supply, albeit barely. The organization said that annual growth in oil demand could average 1.2 million barrels per day between now and 2016.

The vast majority of the growth in demand -- some 95% - is expected to come from China and other Asian countries, and the Middle East, according to the agency.

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At the same time, consumption of natural gas is expected to grow by 2.4% per year between now and 2016, and China is responsible for about one-third of the global increase in demand, said the organization.

"Global trade in gas expands rapidly as more countries become gas importers," said the report. "Natural gas joins oil, iron ore and many others in the club of commodities in which China is the increasingly dominant source of demand."

Oil prices have fallen to their lowest level in four months, as international fears over the possibility of a Greek default on debt payments drive down commodity prices and stocks.