Plunging oil prices cause for concern?

One never knows what will happen next with oil prices, but we do know (per the Legislative Finance Committee) that New Mexico’s economy is more dependent than ever on oil with 35% of the budget directly depending on oil and gas (as the following chart shows).

And, as the chart below that shows, oil prices have taken a sudden turn downward from above $66/barrel to $52 where it stands now. What will happen next? It is impossible to say, but if oil prices suffer a sustained decline it will take a bite out of New Mexico’s increasingly oil-dependent economy.

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