'Everybody is waiting for doomsday' in Texas

Oil prices are at a six-year low, and almost nowhere is the pain being felt more than in Texas.

This weekend, The New York Times published a great look at how the crash in oil prices has impacted the economic fortunes of Karnes County, Texas.

Karnes County is located in the Eagle Ford shale formation, one of the largest oil producing regions in the country.

But as prices have crashed, the value of land in the region plummeted, as did the number of people drillers needed for work.

“Everybody is waiting for doomsday,” Vi Malone, the Karnes County treasurer told The Times.

“Everything was good, and everybody was getting these big checks, and everybody waited for their land to be leased, and then it all came to a screeching halt around the beginning of the year.”

Fredgraph (7)FREDThe stunning collapse in the price of oil.

Over the last several months, we’ve highlighted similar commentary from business owners in the region that came from the Dallas Federal Reserve’s monthly manufacturing report.

The next report from the Dallas Fed isn’t due until August 31, but as recently as the June report, some were saying that the bottom in oil prices appeared to be in.

This, however, clearly turned out not to be the case.

And while prices are weighing on the Karnes County economy, The Times notes that Karnes County is still Texas’ biggest oil producer, pumping out almost 7 million barrels in June, according to The Times.

Recent data from oil driller Baker Hughes indicates that the number of US oil rigs being shut down has stabilised in recent weeks and while oil production has leveled off, it is still near multi-decade highs.

Read the full story at NYTimes.com »

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