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Energy Index growth signals improving state economy

May 02, 2017
Continued growth in oil and natural gas industry employment has moved the Oklahoma Energy Index higher for the month, marking the eighth month in the last 10 that industry activity has increased.

Another 2,100 oil and natural gas industry jobs were added across the state, according to the most recent Energy Index. Increased employment has been driven primarily by increased rig activity, as increased exploration for oil and natural gas production has resulted in a 62 percent increase in the number of active drilling rigs compared to one year ago.

“The industry improvement shown in eight of the last 10 months is a sign for optimism. We see signs of this strengthening in our markets also,” said Chris Mostek, senior vice president of energy lending for Bank SNB. “At the risk of sounding redundant, the storage levels and price levels temper some of this enthusiasm. The industry should remain prudent on CAPEX budgets, overhead expenses and risk management.”

The Energy Index stood at 170.1 using data collected in March, a 1.9 percent increase from the previous month’s reading.

“The consistency of the energy sector recovery is spilling over to the economy at large,” said Dr. Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute. “State employment, income and production are all moving in a positive direction with a positive move in tax revenues to follow. The developing recovery will be too late to save this fiscal year, but should ease somewhat the strains of the year to come.”

The Energy Index is a comprehensive measure of the state’s oil and natural gas production economy established to track industry growth rates and cycles in one of the country’s most active and vibrant energy-producing states. The OEI is a joint project of the Oklahoma Independent Petroleum Association (OIPA), Bank SNB and the Steven C. Agee Economic Research and Policy Institute.

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