How will collapsing oil prices affect Texas? It depends on these two factors, experts say.

[TexasTowelie]

by Kiah Collier, Texas Tribune

Oil prices plummeted to their lowest point in decades over the weekend as Saudi Arabia declared a price war on Russia, adding another stressor to financial markets already reeling amid concerns over the rapid spread of a new strain of coronavirus.

While Texas’ economy and budget are highly sensitive to oil prices as the nation’s top oil-producing state, economic and energy experts and state officials said Monday that it’s too soon to say how big of an economic hit the state will take. That will depend on how long both the Saudi-Russia deadlock and the COVID-19 outbreak persist.

If either one becomes a prolonged crisis, they say, the impact could be devastating.

“The consequences for Texas of the drop in prices over the weekend will depend on two questions: 1) how low, and 2) how long,” Dale Craymer, president of the Texas Taxpayers and Research Association, wrote in an email. “Of course, we can’t look at the impact of a drop in oil prices on Texas in a vacuum. Behind all this is the economic impact of the coronavirus, which is still uncertain.”

Read more: https://www.texastribune.org/2020/03/09/how-will-oil-price-collapse-impact-texas/