Crude Oil Prices Impact Energy Index
July 19th, 2017
A 5 percent decrease in the price of crude oil resulted in a modest contraction of the Oklahoma Energy Index.
A decrease in average monthly crude oil prices from $51.06 to $48.48 sent the Oklahoma Energy Index to 168.8 using data collected in May, a 0.8 percent decrease from the previous month’s reading. However, activity levels in the oil and natural gas industry still remain 13 percent higher than one year ago.
“Despite the recent price decreases, the overall Index has increased year over year,” said Chris Mostek, senior vice president of energy lending for Bank SNB. “However, as the market attempts to rebalance supply and demand, we will see continued price volatility.”
Dr. Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute, noted that all components of the Energy index except for oilfield employment are above year-ago levels, signaling an oil and natural gas industry returning to solid footing.
“Industry activity appears stable, but uneasy as the future price path develops,” Evans said. “The state’s economy continues to improve after consecutive years of energy sector and national economic weakness. The state’s recovery is fragile, leaving businesses and policymakers united in hoping that both the U.S. economy and the state’s energy sector will continue to have positive support.”
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.