As the Covid-19 pandemic decimates the demand for oil and fuel, recent prices for oil by the barrel have cratered into the negatives for the first time ever. The collapse in demand for crude oil is having a tremendous impact on the price per barrel, but this recent foray into the negative price range is not reflective of the reality of the actual oil market.
In New Mexico however, the depression of the oil and gas markets will have resounding negative results for the state’s budget. For everyone dollar drop in the price per barrel of oil, the state loses an estimated 22 million dollars in taxable revenue. This means legislators will have their work cut out for them when they return to Santa Fe later this summer for a special legislative session. The state was projected to have $1.7 billion in reserves at the end of the current budget year but with this dramatic drop in prices cuts will have to be made to make ends meet. Read more HERE.