Agency says oil prices may fall further this year

FILE - In this May 8, 2015 file photo, gas station attendant Carlos Macar pumps gas in Andover, Mass. Gasoline is close to breaking below a key psychological barrier as drivers enjoy some of the cheapest pump prices since the recession. The nationwide average price of a gallon of regular Saturday, Dec. 12, 2015 was $2.02, down 58 cents from this time last year, according to auto club AAA. Experts say it could drop below $2 in the coming days. (AP Photo/Elise Amendola, File)

By Staff and Wire Reports January 20, 2016 2 min read

The International Energy Agency says oil prices may fall further this year due to low demand, warm winter weather and an oversupply of crude.

The organization, which advises countries on energy policy, said in its monthly report Tuesday that global excess supply may reach 1.5 million barrels per day during the first half of the year.

“Unless something changes, the oil market could drown in over-supply,” the IEA said.

U.S. crude prices have fallen 24 percent since the beginning of the year. Benchmark U.S. crude fell $1.03, or 3.5 percent, to $28.39 a barrel in New York on Tuesday.

The drop in oil prices transplates into lower gas prices at the pump. The online service GasBuddy.com said the average price of a gallon of gas in Chattanooga fell Tuesday to $1.58 a gallon – the lowest price since November 2008. At least four stations in East Brainerd area were reporting gas prices fo $1.45 a gallon for regular gasoline on Tusday.