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Oil-state of Oklahoma still under financial pressure

State taxes collections for production lower year-on-year, but signs of improvement emerging.

By Daniel J. Graeber
Treasurer in Oklahoma said the state is still feeling pressure from the downturn in the oil market, but signs of recovery are emerging. Photo by David Gaylor/Shutterstock

The revenue stream for the shale-rich state of Oklahoma shows lingering, but easing, pressure from the energy sector downturn, the state treasurer said.
Oklahoma is one of the more prolific producers of crude oil in the United States, accounting for about 4 percent of the nation's total. A downturn in crude oil prices in early 2016 put negative pressure on state coffers and State Treasurer Ken Miller said Oklahoma was still playing catch-up.
"Gross receipts to the Treasury show the ongoing impact of the prolonged downturn in the energy industry," he said in a statement. "However, the overall rate of decline has slowed during each of the past three months as oil and gas gross production collections have shown moderate increases."
Crude oil prices moved toward the mid-$50 per barrel range after members of the Organization of Petroleum Exporting Countries last year agreed to limit collective production starting in January. Oil prices dropped below $30 per barrel in early 2016.
After the OPEC production agreement was reached, Oklahoma Gov. Mary Fallin, who last year called for a state Day of Prayer for the struggling energy industry, said the deal was a net win for the market.
In December, Oklahoma's government said gross tax collections from oil and gas production were up $5.3 million, or 15.6 percent, from the previous month. Compared with last December, tax collections are up 4.4 percent. For the year, however, Miller's office said oil and gas production tax collections of $350.2 million were down 26.1 percent from the previous year.
The three other major sources of tax revenue for the state -- income, sales, and motor vehicle taxes -- showed declines in collection year-on-year. The state unemployment rate in November, meanwhile, was higher at 5.1 percent than the national average for the fifth month in a row.
Oil-state of Oklahoma still under financial pressure Reviewed by Chidinma C Amadi on 3:23 AM Rating: 5

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