The oil and gas industry shed a record-breaking 26,300 jobs in Texas during April as shutdowns related to the coronavirus pandemic cut demand and sent commodity prices to record lows.
Drilling, completion, production and related sectors employed 192,600 people in Texas last month, a 12 percent drop from the 218,900 jobs in March, new figures from the Texas Workforce Commission show.
The 192,600 upstream oil and gas jobs held at the end of April are at a low not seen since Nov. 2016 while the 26,300 layoffs mark the largest drop of industry jobs in a single month, a review of figures going back to 1990 show.
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The oil field service sector, one that includes drilling rig operators, hydraulic fracturing crews and equipment manufacturers, has been the hardest hit by the downturn. The service sector accounted for 22,300 of the industry jobs lost in April, figures from the Texas Workforce Commission show.
Houston oil field service giant Halliburton has laid off more than 1,900 people in Texas since the beginning of the year while Midland-based rival ProPetro shed more than 1,400 jobs and Houston-based NexTier Oilfield Solutions laid off nearly 1,000 employees, notices filed with the Texas Workforce Commission show.
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, that included them briefly going below zero.
Crude oil prices are now in the $30 per barrel range, 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.
Boom and bust cycles are nothing new to the Texas oil and gas industry, which endured 21 months of job losses in a row during 2015 and 2016 before adding jobs back. Although the coronavirus caused the industry to shed jobs at a record pace, Texas Oil & Gas Association President Todd Staples said the recovery depends on how quickly shutdown orders ease and the economy returns to pre-pandemic levels.
“While many of these necessary reductions have negatively impacted workforce levels, the industry is poised to rebound as the world economy gets back on track and supply and demand levels normalize,” Staples said. “We look forward to expanding the employment levels as market conditions allow.”
