Record month for oil, gas job losses

The oil and gas industry shed a record number of jobs in Texas during April as shutdowns related to the coronavirus pandemic cut demand and sent commodity prices to record lows.

Producers and oil field services companies slashed more than 26,000 jobs in April, the worst monthly loss since the current series of statistics began in 1990, according to the Texas Workforce Commission. Industry employment plummeted to 192,600 jobs, the lowest since November 2016, when oil and gas companies were emerging from the previous oil bust.

The oil field services sector, which includes drilling rig operators, hydraulic fracturing crews and equipment manufacturers, has been the hardest hit by the downturn. The services sector accounted for 85 percent of the industry jobs lost in April, according to the workforce commission.

Houston oil field service giant Halliburton has laid off more than 1,900 people in Texas since the beginning of the year, according to notices filed with the Texas Workforce Commission. ProPetro of Midland shed more than 1,400 jobs and Houston-based NexTier Oilfield Solutions laid off nearly 1,000 employees.

West Texas Intermediate, the U.S. benchmark for crude oil, was already stuck in the unprofitable $50 per barrel range when the coronavirus pandemic cut demand and sent commodity prices to record lows, including one trading session when they plummeted below zero.

Crude oil prices are above $30 per barrel, a price that is well below the $55 per barrel needed by most U.S. shale producers. As a result, exploration and production companies have cut their budgets in addition to scaling back drilling and completion activities.

Oil settled at $34.35 a barrel in New York on Tuesday.

Boom and bust cycles are nothing new to the Texas oil and gas industry, which endured 21 consecutive months of job losses from 2015 and 2016. Texas Oil & Gas Association President Todd Staples said the industry is again

making deep cuts as it tries to navigate the historic collapse in demand and prices and position itself for recovery.

He said the speed of the recovery will depend on how quickly shutdown orders ease and the economy returns to pre-pandemic levels.

“The industry is poised to rebound as the world economy gets back on track and supply and demand levels normalize,” Staples said.

Analysts expect a long, painful climb back. The Norwegian consultancy Rystad Energy, for example, forecast that U.S. production won’t return to pre-pandemic levels until late 2021.