news-details

Coronavirus is killing Texans — and the oil crisis is killing their economy - Raw Story

  • 2 May 2020

Over the past several weeks, Russia and Saudi Arabia have been in an oil war, sending oil prices to extremely low levels. Last week, President Donald Trump said that he spoke to Mohammad Bin Salman and that the two countries had come to an agreement, but Russia replied to the Trump tweet, saying that he had no idea what he was talking about. Still, Trump suggested that he may bail out the oil companies, who already get federal supplements.

It was enough to send the struggling stock market back to closing in the green on Thursday. It closed down again on Friday once it became clear the president didn’t know what he was talking about.

In the meantime, the U.S. oil and gas industry in Texas is struggling to keep up, the Wall Street Journal reported Sunday.

“The prospects are uncertain, and even sizable oil production cuts would fall short of making up for the enormous drop in demand for fuels caused by coronavirus. Prices remain below $30, at levels where most Texas producers cannot make money,” the report explained.

The state is also suffering from jobless claims. The report cited unemployment claims rose by 259,652 in the state “during the two weeks ended March 28, non-seasonally adjusted Labor Department data released Thursday show.”

There is no discrimination in sector. Whether food service, transportation, manufacturing, oil and gas, and everything in between is experiencing jobless claims, the data showed. “Two major shale producers are asking Texas regulators to consider curtailing crude output for the first time since the 1970s.”

While Texas experienced a boom during the 2007-2008 recession, things aren’t the same this time around.

In Texas, “there’s no avoiding this one,” said chief economist James Gaines at the Real Estate Center at Texas A&M University.

“From his job at a Houston machine shop, Kenny Istre saw customers withdrawing orders and demanding discounts for drilling equipment at Taylor Oilfield Manufacturing Inc. even before U.S. crude prices plunged,” the report explained. “Prices were about $28 a barrel Friday, down about 54 percent from the year’s start.”

“This is like a double whammy,” said Kenny Istre, owner of a Houston machine shop. “They were canceling flights every day, and now people aren’t driving to work. The market is going to be flooded with oil.”

Read the full report at the Wall Street Journal.

Enjoy good journalism?

… then let us make a small request. The COVID crisis has cut advertising rates in half, and we need your help. Like you, we here at Raw Story believe in the power of progressive journalism. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and legal efforts to harm workers exploited by abusive bosses. And unlike other news outlets, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

We need your support in this difficult time. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you. Click to donate by check.



Report typos and corrections to:

[email protected]

.


Read More