Driven by increasing crude oil prices, the most recent Oklahoma Energy Index is holding steady after nine months of decline.
The Oklahoma Energy Index, a measure of oil and natural gas industry activity, stood at 159.1 using data collected in March, a 0.3 percent decrease from the previous month’s reading. The modest decline marks the smallest contraction of the index since July, when the index gained 0.4 percent.
“The recent oil price recovery has been a welcome event,” said Chris Mostek, senior vice president of energy lending for Bank SNB. “If sustained, these price increases should help relieve some of the credit migration experienced by the industry the last couple of quarters.”
Dr. Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute, said a 24 percent surge in crude oil prices helped push stock prices of Oklahoma oil and natural gas companies higher. Those increases helped offset losses in natural gas prices and drilling activity.
“If market prices stabilize and equity prices recover further, it should open the door to financial accommodations that will allow even moderately healthy companies to survive this cycle,” Evans said. “Optimism is slowly developing that the bottom of the current energy cycle is near. Only time will tell if the optimism is warranted.”
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.