Energy Index Recovery Begins
Led by increased oil and natural gas industry employment and a slight increase in drilling activity, the most recent Bank SNB Oklahoma Energy Index (OEI) trended into positive territory for the first time since October.
The index of oil and natural gas industry activity moved to 219.57 using data collected in June, a 0.4 percent increase from the previous month’s reading and 16.8 percent below May 2015 levels.
“Since the time June data was finalized and analysis of the Oklahoma Energy Index was under way, we have likely given up some of these gains,” said Chris Mostek, senior vice president of energy lending for Bank SNB. “However, the Energy Index is a valuable tool to monitor the condition of the industry.”
Four of the six index components moved higher in June, led by employment gains for the first time this year. Overall, energy industry employment increased by 900 jobs with a gain of 400 jobs reported in the oil and gas support sector. Employment gains were joined by an increase in rig activity as rig counts were up from May levels by a single rig. Average crude oil spot prices also increased in June, up 56 cents.
“The recent downturn in crude oil prices will likely send next month’s Energy Index lower, but expansion is likely in August,” said Dr. Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute. “While it remains too early to tell, it is possible July will be the turning point that precedes a sustained if modest advance in industry activity through the second half of the year.”
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.
Contact: Cody Bannister at 405-601-2899