Oil prices fall to five-year low; 250,000 jobs at stake in 8 states

HOUSTON – The U.S. benchmark crude closed at its lowest point in five years Monday as domestic crude supplies continued to weigh on global markets.

It fell $1.12 to $53.61 a barrel, two cents under half its annual peak of $107.26 in late June. That means it has dropped four-fifths of the distance it did in the first half of 1986, when an oil bust hammered the Texas economy. The biggest decline in crude prices since then was in 2009, after a U.S. financial crisis spilled into the broader global economy.

“Everybody’s eyes are currently on supply,” said Aaron Calder, a senior market analyst at Gelber & Associates in Houston, referring to U.S. gains of millions of barrels of oil a day has seen in the past few years. “We continue to see more and more supply trickle into the market, while there’s not a lot of new demand popping up.”

In a 50-percent fall in oil prices, Texas and seven other oil-pumping states — including North Dakota, Louisiana, Oklahoma, Alaska and others — could lose combined 249,700 jobs through the middle of 2015, with more than half of that coming from sinking Texas payrolls, according to a Federal Reserve Bank of Dallas model of how falling oil prices impact U.S. jobs.

Other than oil companies and their tool suppliers, manufacturers across Texas, as well as hotels and restaurants in the bustling rural oil towns in the western and southern corners of the state, could feel pain from declining oil prices before other industries, said Michael Plante, a senior research economist with the Dallas Fed, in an interview Monday.