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Breaking News:

WTI Crude Hits Highest Level In 7 Years

US Oil, Gas Industry Sees 26% Decline in Employment

US oil and gas producers have cut 142,000 jobs as of May 2016 since its peak employment levels in October 2014 of 538,000, according to a US Energy Information Administration press release on Friday—a 26% drop over that period.

The 26% decline in oil and gas employment seems to mirror—although not as drastically—the oil and gas rig count, which stood at 404 rigs in May 2016—down a staggering 77% from the 1800 rigs in action in fall 2014.

To put the employment figures into perspective, the average decrease in employment over the 20-month span from October 2014 to May 2016 is 7,100 per month—a figure that dwarfs the jobs cuts in the oil and gas sector during the 2008-2009 recession, which was 51,000 for a 13-month period, according to the press release, or an average of 3,923 per month.

Whereas US oil rig count and jobs are seemingly tied together and followed similarly bleak paths, crude oil production has not followed the same sharp downward trajectory, mainly due to advances in drilling technology. This would seem to suggest that neither the rigs nor the jobs are needed to sustain current production levels, which are not too far off from 2014 levels.

As for the who’s who of job cutting in the oil and gas industry, it seems not many companies are immune; but in May, CNN posted a top ten list of 2016 “job-killing” companies, and not surprisingly, five are in the oil and gas industry.

CNN’s list included chart topper National Oilwell Varco, who cut 17,850 jobs; Schlumberger with 12,500; Halliburton with 10,200; Chevron with 7,500; and Weatherford International bringing up the rear in tenth place with 6,000.

Beyond the list, some in the oil and gas industry have had 2015 cuts that far exceed the 2016 totals. For example, Baker Hughes has cut 3,000 jobs in Q2 and dismissed 2,000 employees in Q1 2016, after already cutting 18,000 sometime in 2015—for a total of 23,000 jobs lost.

Julianne Geiger for Oilprice.com

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  • Craig Woerpel on August 06 2016 said:
    The author should have noticed that rig count started up in mid '09, production started up 2 yrs later in mid '11. Rig count flattened in early '13, production flattened 2yrs later in early '15. Rig count crashed in Jan '15, so logically production will crash in Jan '17. Why would anyone think production can just go on magically forever without the hardware or the people?
  • afisher on August 06 2016 said:
    There is a disconnect here. Maintenance jobs are one thing, but are these individuals the same workers who would be employed when oil companies start any of their projects to find new wells.
  • Kat club on August 05 2016 said:
    More jobs and rigs are still needed to maintain production, even though drilling has become more efficient. This is because there is a time lag between rig activity falling and production falling. So US production will continue to fall unless the number of rigs increases dramatically.

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