Energy Boom:Recession Looms In Texas

The shale oil boom has been a blessing to Texas, making the state an economic standout during the past few years of ho-hum U.S. growth.

But oil's dramatic plunge below $55 a barrel is scaring the shale industry. Since some wells are unprofitable at lower prices, shale companies will be forced to dial back capital spending and cut jobs.
While cheap gas is likely to be a net positive for the U.S., Texas is poised to take a hit because of the pivotal role that oil plays in the state's economy.

"We think Texas will, at least, have a rough 2015 ahead, and is at risk of slipping into a regional recession," Michael Feroli, JPMorgan Chase chief U.S. economist, predicted Thursday.
Texas has become a dominant oil producer, boosting its share of U.S. crude production from 25% to more than 40% over the past five years.
That heavy exposure to crude should go from a big positive to a big negative. Crude oil traded above $100 in June. Now the price is about half that at $54.