High price of oil has benefited some of Texas economy, but will affect cost of almost everything, economist says

Thursday, November 8, 2007

Just in time for the holiday season, the price of a barrel of oil is at all time high levels, with many analysts predicting it could soon surpass $100 a barrel. Bernard Weinstein, the director of University of North Texas' Center for Economic Development and Research and a professor of applied economics, says long-term economic consequences could happen if the high prices stick.

"Oil prices have gone up 40 percent in the past few months, and so far the markets have brushed off those numbers. But when the prices hit the $100-a-barrel level, the economy will feel the effect in the cost of just about everything, because the price of oil is a component in the cost of everything we buy," Weinstein says.

He adds although it's impossible to know how high prices will eventually go, the important thing to note is how long the prices stay at the higher levels. If the oil prices consistently stay above $100 a barrel, he says, "it will clearly be inflationary."

"I would expect the Federal Reserve to stop its series of recent interest rate cuts. It could also mean that a recession would be more likely. It's a brave new world of price increases that has the potential to spook both investors and consumers," he says.

Weinstein says the high oil prices could also impact the value of the U.S. dollar.

"As the dollar loses value against currencies such as the euro, it helps to fuel the increase in oil prices," he says.

In a bit of an odd twist, Weinstein says some parts of the Texas economy have benefited from the recent jump in oil prices.

"There's been a rush of oil drilling activity in the Permian Basin area, and in the Houston metro area, jobs are being created in the energy services industry at levels we haven't seen since the 1970s," he says. "But on the whole, Texas is a net energy importer, so the jump in oil prices has more minuses than pluses for the state."

UNT News Service Phone Number: (940) 565-2108

Category:

Latest News

Friday, April 18, 2014

Students of the late painting professor Rob Erdle, regents professor emeritus at UNT, plan to celebrate his life by displaying his work alongside their own.

Thursday, April 17, 2014

UNT's Contemporary Arab and Muslim Cultural Studies Institute welcomes Sheila Blair, Boston College professor of Islamic and Asian art, for the free lecture "By the Pen: The Art of Writing in Islamic Art."

Thursday, April 17, 2014

UNT will offer a variety of workshops for students, professionals and families this summer.

Robert D. Kaplan
Thursday, April 17, 2014

Kaplan will be the final speaker for this year's University of North Texas Kuehne Speaker Series on National Security. His lecture begins at noon in the Gold Room on the second floor of The Fairmont Dallas hotel

IAA 2014-15 fellows
Wednesday, April 16, 2014

Regents Professor of Studio Arts Harlan Butt and Department of English Lecturer David Taylor will be granted a semester off from teaching duties to work on their projects full time.