growth for the second half of the year. A driving force in the downward shift in economic growth is slowing growth in consumption expenditures, the largest component of real GDP.
Energy Outlook
As shown in Figure 2, both oil and natural gas prices dramatically rebounded from their pandemic declines before declining in 2023. In its current (July 2024) Short-Term Energy Outlook, the US Energy Information Administration (EIA) forecasts both oil and natural gas prices to increase slightly by the end of 2024. OPEC+ cuts in production are anticipated to exceed the announced targets, reducing global oil inventories. Reduced production this year underpins the forecast of an increase in the price of natural gas.
100 110
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
20 30 40 50 60 70 80 90
85.1
3.09
West Texas Intermediate (WTI) crude ($/barrel) Henry Hub Price of Natural Gas ($/mmbtu)
Figure 2. Energy Prices (US Energy Information Administration-EIA) (Left axis-WTI oil price $/bbl; Right Axis-Henry Hub natural gas price $/MMBtu)
As shown in Figure 3, the rebound in energy prices has modestly increased energy sector employment in both the state and nation. Oklahoma’s energy sector employment declined earlier and by a greater percentage than did energy sector employment nationwide going into the pandemic. The r ecovery in Oklahoma’s energy employment also has lagged that of the nation. By the end of 2024, national energy sector employment is forecast to rise to eighty-seven percent of its 2019 Q1 level, while Oklahoma’s is expected to only recover to sixty-three percent of its 2019Q1 level. According to Baker Hughes Inc., the drilling rig count in Oklahoma increased from a low of ten over two years ago to thirty-five last month. The number of drilling rigs had risen to seventy in the week of November 23 rd , 2023, before declining to the current level.
Powered by FlippingBook