Texas oil production for March was up 1 percent from the previous month, state data show, as crude oil prices staged a sustained recovery.

The Railroad Commission of Texas, the state energy regulator, reported preliminary crude oil and condensate production figures for March at 87.8 million barrels, a 1.1 percent gain from the previous month. Year-on-year, the daily crude oil production rate of 2.5 million bpd for March was up 8.6 percent.

Crude oil prices rallied 7 percent in March, which may give energy companies in Texas more incentive to produce. The rig count, a loose barometer used to gauge the health of the industry, remains in decline, however.

Texas is the No. 1 oil producer in the United States and its rig count represents roughly 45 percent of all activity in the country.

Analysis group Wood Mackenzie said in early May that energy companies working in the Eagle Ford shale basin in Texas may be acclimating to the lower price of crude oil, down about 18 percent last year. Information reported by Fuel Fix, an energy site for the Houston Chronicle, shows Texas producers could break even with oil at around $41 per barrel by next year.

So far this year, more than 5,000 people have lost their job in Houston, where many energy companies have their U.S. headquarters, because of the market downturn. The Federal Reserve Bank of Dallas said the state economy was damaged by the downturn, with sectors outside of energy starting to feel the impacts.

Keith Phillips, a senior economist with the bank, said there's little chance, however, of a formal recession for Texas. A metric created by the bank, the Texas Business Cycle Index, finds that, overall, the state economy is expanding.