26% of U.S. Oil & Gas Workers Have Lost Their Jobs

oil and gas energyJulianna Geiger: 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.

The United States Oil Fund LP ETF (NYSE:USO) closed up $0.02 (+0.20%) on Friday to $9.86 per share. The USO, which closed up 1% for the week, has still fallen 10% year-to-date and 73% over the past two years amid a prolonged oil price slump.

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This article is brought to you courtesy of OilPrice.com.

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