Oct. 11--Oil prices that have slumped to barely half of last summer's record highs could make Houston more vulnerable to the economic woes afflicting the rest of the country, a top local economist predicts.

Houston isn't facing a repeat of the 1980s oil bust that gutted a city then so dependent on such a cyclical business, said Barton Smith, the University of Houston economic guru who saw that slump coming when most others didn't.

But now that crude has fallen 47 percent from its summer highs north of $140 a barrel, he predicted, Houston's pain will be more like everyone else's.

"A global recession translates into weakness in demand for oil, and that's the danger for Houston," Smith said.

Crude for November delivery closed down 10 percent at $77.70 a barrel Friday on the New York Mercantile Exchange. Natural gas tumbled by 4.2 percent to $6.535 per million British thermal units on the Nymex.

"It took some 22 years of crude oil futures trading to realize the first WTI settlement price of over $60 a barrel. Consider then, that in the last 90 days, the value of sweet crude has dropped by in excess of $62 a barrel," Tom Kloza, chief oil analyst for the Oil Price Information Service, said of West Texas Intermediate crude.

When crude reached $77 a barrel in July 2007, it was about halfway up the climb to this summer's all-time highs. The rise helped fuel a boom in exploration and production spending, from deeper waters to Canada's oil sands to more expensive efforts to squeeze more oil from existing wells.

At first, crude rose despite growing economic worries, even as U.S. demand started shrinking when oil at $145 translated into gasoline at $4 and above.

Demand remained robust then in emerging economies of China, India and the Middle East. That reduced the sting on Houston's energy hub -- which has much of the world's exploration and production expertise.

But the demand from those emerging regions began shrinking, too, as the financial crisis spread. Banks in the U.S. and elsewhere started failing or getting bailouts. Investors started running for the exits.

The Dow Jones industrial average on Friday closed out its most volatile week ever, down more than 18 percent, while stocks in Great Britain, Germany, Japan and France were nursing bruises as well. The federal government's $700 billion bailout and interest cuts by the Federal Reserve and central banks in other nations have yet to thaw frozen credit markets or restore frazzled investor confidence.

In addition, energy stocks took a beating throughout the week.