Oklahoma's economy gaining some ground with oil price recovery, though overall strains persist, state data show. File Photo by Gary C. Caskey/UPI | License Photo
OKLAHOMA CITY, Dec. 8 (UPI) -- Oklahoma's economic footing has improved with the recovery in oil prices, though there are still lingering effects of the downturn, the state treasurer said.
The shale-rich state is one of the more prolific producers of crude oil in the United States, accounting for about 4 percent of the nation's total. With crude oil prices suppressed in relative terms, the state said tax collections from oil and gas prior had been lower compared with the previous year for nearly two years.
With oil prices holding above $45 per barrel over several weeks, the state Treasury Department said gross production taxes from November generated $34.1 million, up 12.9 percent year-on-year and the second month for gains from last year.
"It would appear our anchor industry is making slow but steady improvement, while the spillover effect of the long energy price downturn on income and consumer spending is ongoing," State Treasurer Ken Miller said in a statement. "My hope is that we will begin to see overall improvement with renewed oil field activity following OPEC's plans to cut production levels and bring supply more in line with demand."
The Organization of Petroleum Exporting Countries in late November agreed to a cap in total production starting in January. The aim of the agreement is to bring the market back into balance, though recent industry data show the market still favors the supply side.
Though falling from peaks in the immediate wake of the decision last week, crude oil prices are near the $50 mark. The state said gross production collections from November were based on West Texas Intermediate, the U.S. benchmark price for crude oil prices, at $45.18 per barrel.
Last week, Oklahoma Gov. Mary Fallin said the OPEC production decision was welcome news for her state.
Economic hardships continue for Oklahoma, however. Compared with October, gross production collections are down $1 million. Collections from income and sales tax – two of the largest revenue sources for Oklahoma -- were lower year-on-year and the state unemployment rate has been higher than the national average for the last five months.