Weld County vulnerable if oil prices remain low, Wells Fargo warns

Wells Fargo SecuritiesBy Aldo Svaldi – The Denver Post – February 4, 2014

Colorado overall will fare better than other states in the oil patch if crude prices remain low, but the same can’t be said for Weld County, according to a report Wednesday from Wells Fargo Securities.

“Weld County is likely to suffer the worst in the state. Denver may also face some downside risk, as it serves as a hub for the energy business in the surrounding state,” said Mark Vitner, a senior economist with Wells Fargo Securities.

A barrel of crude oil sells for less than half of the near-term peak of $107 it reached in June, and is below the break even point where many domestic producers can afford to keep drilling.

“We feel that Colorado will hold up relatively well given the slide in energy prices,” Vitner said on a conference call.

The state ranks as the nation’s seventh largest oil producer and has the 10th highest concentration of workers employed in oil and gas. But it has a more diversified economy that went into the oil slump with momentum.

About 1. 2 percent of the state’s workforce is in oil and gas extraction and supporting industries. In North Dakota and Wyoming, upwards of 6 percent of workers make a living directly from petroleum.

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