Oil Jobs Squeezed as Prices Plummet

[question everything]

U.S. oil and gas companies have been an engine of growth through much of an otherwise lackluster economic expansion, providing steady employment, solid wages and fierce competition for workers across wide swaths of the country. Now, after a roughly 50% plunge in oil prices, exploration and production companies are cutting capital budgets, service companies are weighing layoffs and nonenergy firms that popped up to support the industry are bracing for a protracted slowdown.

One company caught in the industry downturn is Hercules Offshore Inc. The Houston-based firm is laying off 324 employees, roughly 15% of its workforce, because oil companies aren’t renewing contracts for its offshore drilling rigs in the Gulf of Mexico while crude prices are depressed.

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Lower oil prices are still expected to provide an overall boost to the U.S. economy... Still, for the energy industry, the belt-tightening is starting to crimp what had been one of the brightest patches of the labor market.

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Some forecast that companies providing support services to oil and gas companies could lose 40,000 jobs by the end of 2015, about 9% of the category’s total, if oil stays around $56 a barrel through the second quarter of next year. Equipment manufacturers could shed 5,000 to 6,000 jobs, or about 6% of total employment for such companies. These aren’t big numbers in an economy where total nonfarm payrolls surpassed 140 million last month. But the jobs generally offer good wages and create demand for other services.

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An extended downturn could hit hardest in states such as North Dakota and Texas, which have benefited the most from hydraulic fracturing, or fracking, technology that allows oil to be pumped out of shale formations. “While the rest of the country looks to benefit from cheap oil, Texas could be headed for recession,” Michael Feroli, chief U.S. economist at J.P. Morgan Chase & Co., said in a recent note to clients. During an energy-price collapse in 1986, the Lone Star state suffered rising unemployment, falling home prices and later a banking crisis.

More..

http://www.wsj.com/articles/job-engine-running-low-on-gas-as-energy-costs-tumble-1419619419

[onehandle]

1. The real red state oil economy is based on flipping burgers. nt

[airplaneman]

2. and soon to come if oil prices stay down.

Fracking derivative will start popping ringing up huge losses for the six major banks in this country.
Actually I think the oil price crash is evidence of a global recession and deflation setting in.
Its not just oil prices that have gone down. Copper, Oil, Gold, and many other commodities are also taking a hit. You will be seeing a number of grocery store prices coming down also. I guess we will see.
-Airplane

[Yavin4]

3. +100000

Deflation is a result of austerity measures. Couple that with concentration of wealth at the top and there's simply not enough money moving around the global economy.

[sendero]

5. I think..

....."the oil price crash is evidence of a global recession and deflation setting in" I agree with you.

While no one (except "conservatives" and sociopaths) likes seeing anyone lose their job through no fault of their own, the hue and cry about oil jobs cracks me up.

Hey, lets double the price of corn so we can create so agricultural jobs! That's the ticket. And it is as patently ridiculous as worrying about a few jobs when a hundred million people are going to have more disposable income to spend with lower oil prices.

[aspirant]

4. What about all those oil workers

Blue Dog Mary was dreaming of?