Energy Index Falls With Oil Prices
Falling oil prices have taken their toll on the Oklahoma Energy Index (OEI), causing the single largest monthly drop in the index since September 2009.
Average crude oil prices fell 10 percent in October. But despite those falling prices, oil and natural gas industry employment grew by 700 jobs, a signal that short-term price challenges will be more than offset by long-term opportunities in Oklahoma’s oil and natural gas fields.
“While the increase in new Oklahoma jobs is a positive sign, the recent decline in oil prices naturally will cause producers to evaluate their investments in certain fields,” said Chris Mostek, Vice President of Energy Lending for Bank SNB. “The International Energy Agency has issued concerns about such decreased investments, which should result in lower production and future price hikes. This scenario would drive positive growth in employment in the long term.”
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.
The index of oil and natural gas industry activity fell to 258.16 using data collected in October, a 1.7 percent decrease from the previous month. However, the index remains 2.5 percent higher than one year ago.
Dr. Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute, said oil and natural gas markets are already pointed in a more optimistic direction, with oil prices stopping an 8-week slide and severe cold in the Northeast spurring natural gas demand.
MEDIA RELEASE Contact: Cody Bannister at 405-601-2899