LONDON (Reuters) - Rising U.S. shale oil production will help meet most of the world's new oil demand in the next five years, even if the global economy picks up steam, leaving little room for OPEC to lift output without risking lower prices, the West's energy agency said.

The prediction by the International Energy Agency (IEA) came in its closely watched semi-annual report, which analyses mid-term global oil supply and demand trends.

"North America has set off a supply shock that is sending ripples throughout the world," IEA Executive Director Maria van der Hoeven said on Tuesday.

"The good news is that this is helping to ease a market that was relatively tight for several years," she added. Oil on Tuesday traded near $103 a barrel, well below its peak of $147 in 2008.

The IEA said it expected global demand to rise 8 percent on aggregate between 2012 and 2018 to reach 96.7 million barrels per day (bpd) based on a fairly optimistic assumption by the International Monetary Fund of 3 to 4.5 percent global economic growth a year during the period.

That incremental demand will be met mainly by non-OPEC production, which will rise by more than 10 percent between 2012 and 2018 to 59.31 million bpd, the IEA said, increasing its estimate of non-OPEC supply in 2017 by 1 million bpd versus its previous report in October 2012.

The United States will overtake Russia as the world's largest non-OPEC producer as early as 2015, the IEA said.

That may leave OPEC, which had been long seen as the last resort for the world to meet rising demand, with output fluctuating around the current levels of 30 million bpd for the next five years.

The agency cut its estimate of the demand for OPEC crude in 2017 to 29.99 million bpd, down by 1.22 million bpd from its previous report six months ago.

It said OPEC's spare capacity will rise by over a quarter to reach 6.4 million bpd or 6.6 percent of global demand, giving an additional cushion to potential supply shocks, the report said.

The adoption of U.S. shale technology could help Russia and China boost production from unconventional reserves, but new projects may slow in other areas.

"Several members of the (OPEC) producer group face new hurdles, notably in North and sub-Saharan Africa. The regional fallout from the 'Arab Spring' is taking a toll on investment and capacity growth," the IEA said.

"Downward adjustments across the (OPEC) group are partly offset by substantially stronger growth in Saudi capacity than previously expected, reflecting newly announced development projects," it added.

Iran's sustainable crude production capacity is likely to fall by as much as 1 million bpd to 2.38 million bpd by 2018, the lowest in many decades, due to Western sanctions, the IEA said.

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EUROPEAN REFINERS AT RISK

The IEA said the balance of global supply growth, until recently evenly split between OPEC and non-OPEC, was tilting towards the latter.

"North America thus increases its share of supply growth both within the non-OPEC group and more globally," it added.

In every other aspect of the supply chain, be it demand, refining, trade or storage and transportation, the fast rise of emerging market and developing economies is striking, it said.

These economies are projected to overtake advanced economies in oil product consumption from the second quarter of 2013. This lead will widen from 49 percent of global demand in 2012 to more than 54 percent by 2018.

The IEA said that beyond the well known story of growth in Brazil, China, Russia, India, Saudi Arabia and South Africa, many African nations were also on the rise on the global oil consumption map.

The IEA also predicted shifts in the global refining industry as countries such as India and Saudi Arabia build new refining capacity.

The expansion of global refining capacity will outpace upstream supply growth as well as demand growth, bringing refining margins under pressure. Higher-cost refineries will face stronger competition.

"European refineries are at particularly high risk of closure over the forecast period," the IEA said.

The IEA added that another consequence of the surge in U.S. production was a shift in natural gas pricing, which would challenging the conventional wisdom that products produced from oil will continue to dominate the market for transport fuels.

"Cheap and abundant natural gas has already facilitated the transition of the U.S. economy towards broader use of the fuel," the agency said. Natural gas will increase its share of road transport fuels to 2.5 percent in 2018 from 1.4 percent in 2010, it forecast.

(editing by Jane Baird)

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