After oil prices peaked and began to recede in 1981, U.S. oil and gas extraction employment declined, moderately in some States and severely in others. Oil prices declined gradually from 1981 through 1985 mainly because of reduced demand, but precipitously in early 1986 because of increased supply. Because both supply and demand changes are likely to be temporary, the future price of oil is expected to be higher. However, current indications suggest that energy price increases may be less violent and disruptive than those since the 1972-73 oil embargo.