Higher prices for oil and natural gas, as well as increased drilling activity, drove the Oklahoma Energy Index to its fastest increase in more than five years, according to the providers of the index.

A 40% increase in the monthly average for natural gas prices and a 13% increase in crude oil prices has renewed optimism in Oklahoma's oilfield.

"The improvement in the index over the last three months supports the feeling of a possible recovery in the energy sector. Oil inventories remain high, but short-term equipment and labor constraints provide a window for inventories to decline," said Chris Mostek, senior vice president of energy lending for Bank SNB. "While early, 2017 is off to a good start for the industry and the Oklahoma recovery."

Last week's rig count from Baker Hughes Inc. showed that the Granite Wash of western Oklahoma and the Texas Panhandle is enjoying a bit of a recovery lately. The Granite Wash picked up five rigs during the week just ended to rest at 13 units running, according to BHI; that's three more than the play had a year ago. Oklahoma, however, saw the departure of one rig to end the week with 101 running, but that's still up 28 units from one year ago.

The South Central Oklahoma Oil Province (SCOOP), and STACK (Sooner Trend Anadarko Basin, mostly Canadian and Kingfisher counties) are up 18% and 59%, respectively from their year-ago levels, according to BHI data released last Friday.

The Energy Index is a comprehensive measure of the state's oil and natural gas production economy established to track industry growth rates and cycles. It is a joint project of the Oklahoma Independent Petroleum Association, Bank SNB and the Steven C. Agee Economic Research and Policy Institute.

Improving commodity prices and increased drilling activity helped push the Energy Index upward to 167.2 using data collected in December, a 3% increase from the previous month's reading of 162.3 and the largest monthly gain in the index since 2012.

"Industry activity contracted through much of 2016 before forming a bottom in the middle of the year and slowly improving through the second half of the year," said Russell Evans, executive director of the Steven C. Agee Economic Research and Policy Institute. "The year ended roughly where it started, with industry activity expected to continue expansion through 2017."

Evans said oil and gas employment, while continuing to decline to close 2016, is expected to trace out a bottom in the first half of 2017.

Texas has a similar index -- the Texas Petro Index -- which also has charted gains recently.