The Source: Oil Industry Cuts Jobs, Wary State Waits And Watches
Oil prices resumed their fall in prices after a strong showing Wednesday. Falling dramatically from a June 2014 peak of more than $100 a barrel, the price hovers below the break-even point for Eagle Ford's supply, at $53 per barrel, according to Richard Baird Equity Research.
With this fact comes layoffs to an industry that employs between 300,000 and 400,000 people.
San Antonio-based Lewis Energy Group announced Wednesday it will reportedly layoff 20 percent of its 1300 employees. The company claims to be the first player in the Eagle Ford shale, but that distinction can't change the economics of today's oil market. Houston-based Apache, another Eagle-Ford player, has announced it will cut 250 people, or 5 percent of its current workforce. Oil giant Halliburton has terminated an estimated 1,000 jobs already and may see further reductions.
More job cuts are on their way, Karr Ingham, an independent petroleum economist, forecastes that job losses will increase through at least the next six months. He says that drilling and hiring were going gangbusters long after the June peak and into the serious dip in prices, so production remaining strong will mean a continued glut of supply and low prices.
Tuesday the Federal Reserve Bank of Dallas announced its numbers for job growth in the coming months. The drop in oil prices did affect the state's expansion, slowing it to between 2 and 2.5 percent, or 140,000 fewer jobs than last year. Increased consumer spending and a diverse job sector should insulate the state from the oil shock of the 80s.
Are you worried about your job in the oil industry?
- Karr Ingham, petroleum economist and owner of Ingham Economic Reporting based in Amarillo, Texas.
- Joseph Triepke, finance professional who oversees community and content at Oilpro.com, a professional network for the oil and gas industry.