Energy Index: Oil and gas industry recovery continues in Oklahoma
The slow and steady march back to pre-pandemic levels of activity continues for Oklahoma’s oil and natural gas industry.
Data from the most recent Oklahoma Energy Index (OEI) shows industry employment is holding steady as increased oil and natural gas prices offer the state’s oil and natural gas producers opportunities to cautiously expand production activities.
“Rig activity is slowly returning as prices improve,” Petroleum Alliance of Oklahoma President Brook A. Simmons said. “While we are still far from the levels of activity we have seen in years past, the slow but steady addition of drilling rigs to the Oklahoma landscape is a welcome sign of an industry in recovery.”
Oklahoma’s oil and natural gas fields averaged 20 active drilling rigs per week in April, up from 17 active rigs per week in March. Today, the state’s rig count stands at 27 and Oklahoma is expected to pass the 30-rig mark in the early days of summer.
That increased rig activity and steadying employment in the industry helped push the Index higher using data compiled from April reports. The Energy Index now stands at 87.6, an increase of 1.5% from the previous month but 11.5% less than one year ago.
Economist Russell Evans, who compiles the Oklahoma Energy Index (OEI), said complicating the long-term outlook for the state’s defining industry is the still unresolved inflation expectations from extraordinary rounds of federal stimulus dollars designed to support household incomes.
“The Oklahoma economy is nearing full health in many ways even as policy continues to provide nearly unprecedented levels of income support,” said Evans, executive director of the Steven C. Agee Economic Research and Policy Institute. “In the short run, this provides support for the energy sector as it literally provides the fuel for a rapidly expanding economy. In the long run, however, policy will be tested as officials hope to accomplish the rarest of policy feats — a soft landing of an overheating economy back to its sustainable, full-employment level of production.”
The OEI is a comprehensive measure of the state’s oil and natural gas economy established to track industry growth rates and cycles in one of the country’s most active energy-producing states. The OEI is a joint project of The Petroleum Alliance of Oklahoma and the Steven C. Agee Economic Research and Policy Institute.