As many economist have said, this is the best energy downturn you will ever see in Oklahoma. Despite prices that at one time fell to below $30 a barrel, Oklahoma oil has recovered to $44 a barrel and predictions are for higher prices by the end of the year. As I had stated before in Oklahoma City real estate market conditions, even with oil at lower prices our jog growth and unemployment rate have both stayed the same. What is interesting about oil drilling in Oklahoma is that extraction cost are about $14 to $22 a barrel, so recently Devon Energy, one of the biggest independents and located in downtown Oklahoma City reported that oil above $40 yielded a return on investment of 40%. In other words, it is time to drill again. The pace of drilling will grow steadily because oil at $65 a barrel is what will accelerate the rig count. Oklahoma is sitting on 70 billion barrels of oil in shale and even more in natural gas. Long term the prospects for the energy sector in Oklahoma is bullish. Luckily for us in Oklahoma City real estate, we have had a vibrant market that will only get better as prices rise. I know that for many people in the US this may not be good news, but for those of us in Oklahoma we welcome it. For more economic information as well as the state of real estate in Oklahoma City, please contact me at joe@joepryor.com.
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