DALLAS, April 21 (UPI) -- The Texas economy is facing pressure from lower crude oil prices, though it's better able to weather the storm than in the past, state economists said.
Crude oil prices are about 60 percent lower than they were at their recent peaks above $110 per barrel in mid 2014. That's left states that depend on the energy sector struggling with declining revenues and higher rates of unemployment.
"The energy industry now accounts for approximately 2 percent of Texas employment and 9 percent of gross domestic product," Dallas Fed President and CEO Rob Kaplan wrote. "This is a good deal lower than the 1980s when the downturn in energy helped drag the state into a severe recession."
Crude oil prices have recovered to around $44 per barrel following a series of rumors surrounding potential production agreements among oil-rich nations. Karr Ingham, an economist who develops an oil-based metric for Texas, said the rally hasn't been strong enough to boost prospects in the state's oil and gas industry. Over the last 16 months, the state has lost roughly 84,000 oil and gas jobs.
On the rebound in crude oil prices, Ingham said in emailed statements that "it may or may not be the real deal." Jobs in the exploration and production side of the industry may continue to face pressure because of lower spending commitments by energy companies, though he said net energy employment could start to recover over the rest of the year.
Economists at the Dallas Fed said the economy nevertheless is more diverse now that it was during past crises. From banking to housing, the reports find an underlying potential for durability.
"As we look beyond 2015 and 2016, I am very optimistic about the future of this district," Kaplan wrote. "As the headwinds from energy begin to fade I believe our great strengths will come to the fore."