Will Texas reel under oil price drop? | The Star Telegram

Let’s face it: Texas has let itself get overconfident, for what must be at least the millionth time, about its oil and gas wealth.World markets are showing us, for the equally millionth time, how risky that is.Fortunately, our state’s economy is more diversified than it has been in previous energy declines.The current drop probably won’t hurt as bad as, say, the similar declines in 1985-86 and 1990-91.But the current declines are severe, especially for oil, and they will hurt.Oil prices began dropping in June and are down 45 percent this year, Bloomberg reported Tuesday.The news service said the highest U.S. oil production in more than three decades has contributed to a global surplus estimated by Qatar at 2 million barrels a day.U.S. producers are scaling back on drilling. That hits home in Texas, where drilling in the Permian Basin of West Texas and the Eagle Ford Shale of South Texas has been at the forefront of the national boom.Oil-field services company Baker Hughes said the U.S. onshore drilling rig count fell by 35 last week to 1,840, including oil and gas rigs.That’s the third consecutive weekly decline and one of the sharpest since summer.In Texas, the number of active rigs dropped by 16, to 852.

via Will Texas reel under oil price drop? | The Star Telegram.

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