HOUSTON—The upstream sector in Texas is undergoing a mild state of contraction based on data through June, according to Karr Ingham, a petroleum economist for the Texas Alliance of Energy Producers.

The decline can be “unnerving” for both producers and the state of Texas which relies on the energy industry to help fund a portion of roads, schools and emergency services from the state and local taxes and state royalties paid by oil and gas companies, Ingham said during a midyear update of the Wichita Falls, Texas-based trade group’s “Texas Petro Index” at the Petroleum Club of Houston on July 31.

Current crude oil prices are not “high enough to stimulate additional growth,” said Ingham, the creator of the index which tallies various exploration and production indicators such as crude oil and natural gas prices and markets, the statewide rig count, drilling permits, industry employment and crude oil and natural gas production.

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