U.S. energy sector bankruptcies reached levels during the final three months of this year last seen in the Great Recession, as the financial toll from lower commodity prices squeezed oil and natural gas producers, according to the Federal Reserve Bank of Dallas (Fed).

Sustained lower oil and natural gas prices aren’t the only issue, though, economists said in a report Wednesday. Domestic exploration and production companies also have faced higher costs to produce than their international counterparts.

“At least nine U.S. oil and gas companies, accounting for more than $2 billion in debt, have filed for bankruptcy so far in the fourth quarter,” said Fed economists Martin Stuermer and Navi Dhaliwal. “If bankruptcies continue at this rate, more may follow in 2016.”

Upstream firms also have slashed capital expenditures, with spending estimated to be down by more than half (51%) from the fourth quarter of 2014 to the third quarter of 2015.

“Overall, market expectations have shifted toward a weaker price outlook” because of slower-than-expected declines in domestic crude production, the prospect of earlier-than-expected output increases from Iran and “broad disagreements” within OPEC, the Organization of the Petroleum Exporting Countries.

Global oil supply is set to exceed demand by 0.6 million b/d in 2016, and “it’s possible that global inventories might not begin to fall until 2017,” the economists said. “Given the great uncertainty surrounding projections and the timing of supply and demand changes, the coming year promises to be a dynamic one for oil markets.”

Fed economists also estimated that about 70,000 U.S. energy sector jobs have been lost since October 2014, a 14.5% decline year/year. And the layoffs continue, said Stuermer and Dhaliwal.

“Job losses and falling energy prices portend continued distress for the oil and gas sector in 2016.”

Federal data indicate U.S. crude oil production has remained relatively flat, despite the cutbacks.

“U.S. production edged up to 9.38 million b/d in September. The actual September data reveal that weekly estimates strongly underestimated U.S. production. Gulf of Mexico production, which grew 0.5 million b/d from July to September, has partially offset falling onshore production,” the economists said.