The International Energy Agency's new five-year oil market outlook warns that surging U.S. oil production might not be enough to prevent inadequate global supplies in a few years.

Why it matters: The annual report released Monday signals that despite the price rebound and a major upward revision in U.S. production estimates, the agency remains concerned about the shape of the global market as soon as the early part of the next decade.

"Upstream investment shows little sign of recovering from its plunge in 2015-2016, which raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020," writes IEA executive director Fatih Birol.

Check out the chart above: The latest forecast shows global oil demand rising by nearly 7 million barrels per day over the next five years to reach roughly 105 million barrels per day in 2023.

Worldwide oil production capacity is forecast to expand by roughly 6.4 million barrels per day over the same period, over half of which comes from the U.S. shale surge that has sent U.S. production to record levels, and reach 107 million barrels per day by 2023.

The big picture: The margin between demand and production capacity will nonetheless get very thin in a few years, IEA said.

"The upshot of our analysis is that the market could go through two phases during the next six years. Through 2020, record supply from non-OPEC countries more than covers expected demand growth," the report states.

"But by 2023, if investments remain insufficient, the effective global spare capacity cushion falls to only 2.2% of demand, the lowest number since 2007. This raises the possibility of oil prices becoming more volatile until new supplies come on line," it adds.

One key number: The new five-year outlook boosts the IEA's projection of U.S. supply growth by over 2 million barrels per day compared to the prior edition.