HOUSTON (KTRK) -- If you haven't noticed gasoline prices have been falling in Houston, you probably haven't been driving your car.
The price is under $3 a gallon at most gas stations in the area. Prices are at their lowest level in several years.
The reason is a glut of crude. The U.S. is now a major oil and gas producer, fueled in large part by shale drilling in Texas. The state now producers more than 3 million barrels of crude a day.
Slowing economies in Asia and Europe also contributed to the surplus of oil on the market. And as supplies have risen, prices have dropped. It's interesting to note that there's been no decrease in the miles driven in the U.S. More fuel-efficient vehicles mean less fuel needed.
But in Houston, the so-called energy capital of the world, there's the other side to consider. It's an economy still largely based on oil and gas, and there are indications that the drop in oil prices could have an effect.
According to Ralph Baird, president of Baird Petrophysical, independent consultants with smaller energy company are seeking full time jobs with larger companies. It's the small companies at risk during price declines.
Bob Tippee of the Oil and Gas Journal says the smaller operators have more of their cash tied up in continuing production and debt. Major oil companies which also operate their own refineries are better equipped to weather a downturn.
The closing price Tuesday for West Texas Intermediate crude, was just over $81 a barrel. Earlier this week, it dipped below $80, which sent a shudder through the industry.
A Wall Street investment firm on Monday predicted the price could drop to around $70 a barrel next year, then move up.
Baird doesn't expect the cut in prices to adversely affect Houston; rather, solidify its energy reputation, should smaller companies be bought up by larger ones, many of which are headquartered here.