Study Reveals the 10 US States Hurt Most by Falling Oil Prices
13 January 2015 - 2:02AM
Most Americans may be relieved to see today's relatively low oil
prices, but that relief can come at a steep cost to the U.S. states
that rely on oil production to help power their economies,
according to a new study by MoneyRates.com.
The study, which examined states' rates of oil production and
consumption as well as how much of its workforce is employed in the
production of oil, finds that North Dakota is the state that is
suffering worst from the recent decline in oil prices.
Richard Barrington, CFA, senior financial analyst for
MoneyRates.com and author of the study, says that while oil
production has been a significant asset to North Dakota's economy
in recent years, the drop in oil prices could slow its future
growth.
"North Dakota has been a real bright spot economically in recent
years," says Barrington. "For example, it has the lowest
unemployment rate of any state. However, that boom has largely been
a function of higher oil production. As this study shows, that
makes its economy especially vulnerable to lower oil prices."
At 4.61 percent, the percentage of oil workers in North Dakota's
workforce is the second highest in the nation, and the state
produces more than eight times the amount of oil that it consumes.
That's a bad combination in the context of lower oil prices, says
Barrington. According to the study's calculations, falling oil
prices have cost North Dakota more than $11 billion dollars in 2014
– or roughly $16,000 per resident.
While oil-rich states such as Alaska and Texas also made the
list of the 10 states hit hardest by falling oil prices, other,
less predictable states such as New Mexico, Kansas and Utah also
made this list. Here are the full rankings:
1. North Dakota 2. Wyoming 3. Alaska 4. Oklahoma 5. New Mexico
6. Colorado 7. Montana 8. Texas 9. Kansas 10. Utah
Barrington says that while housing robust oil production is
generally good for a state, falling oil prices can put a
significant damper on these states' economic performance while
boosting the economies of states that produce little or no oil —
particularly those that also consume a lot of it.
"Ordinarily, having little or no oil production and high
per-capita consumption would be bad things," says Barrington. "In
the context of falling oil prices though, suddenly those attributes
determine who the biggest beneficiaries are."
For more details on the study, please see
http://www.money-rates.com/research-center/states-hurt-falling-oil-prices.htm.
Methodology
This study ranked the states based on an analysis of their
production and consumption of oil, as well as the percentage of oil
workers employed in each state's workforce.
About MoneyRates.com
MoneyRates.com has been a leading source of information on bank
rates, personal finance, savings accounts and investing since 1999.
The site seeks to provide the highest rates on CDs, money market
accounts and high-yield savings accounts. MoneyRates.com is owned
and operated by QuinStreet, Inc. (Nasdaq:QNST), one of the largest
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CONTACT: Alex Bryant
MoneyRates.com
abryant@quinstreet.com
650.703.5214
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