If you’re employed in the oil industry, now might be a good time to let out a sigh of relief.
According to a new report out Thursday by Challenger, Gray & Christmas, a Chicago-based outplacement and career transitioning firm, job cuts related to oil prices are finally ebbing. In May, firms based in the United States planned just over 1,000 lay-offs that are attributable to the drop in oil prices. That’s a huge decline from April’s lay-off totals. In that month, firms blamed 20,675 job cuts on falling oil prices. In March, cheap oil accounted for 36,594 lay-offs, according to the firm. Year-to-date, declining oil prices are responsible for 69,304 job cuts, according to Thursday’s report.
“Oil prices are starting to stabilize. Exploration and extraction companies responded quickly to the drop in prices, but they are likely to be careful about cutting too deeply, as they will need workers on hand when demand inevitably increases. Unless, there is another severe drop in the price of oil, we probably will not see another surge in oil-related job cuts this year,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in the report.
In April, oil-rich North Dakota, which has seen tremendous job growth thanks to the fracking revolution, was the only state with a significant year-over-year increase in unemployment, according to Bureau of Labor Statistics’s latest unemployment report. In April, joblessness there rose 0.4% from the same month in 2014, an increase that was likely due to job reductions in the oil industry.
While the report by Challenger, Gray & Christmas is good news for U.S. Oil workers, it’s very much the opposite for the Organization of Petroleum Exporting Countries, whose ministers are meeting in Vienna today and tomorrow to decide on how much oil to pump for the next six months.
The Saudi-led cartel that supplies over a third of the world’s oil triggered last year’s price collapse by refusing to cut its output, in an effort to stop U.S. Shale producers eating away its market share and its power to dictate world prices. Most observers expect it to leave output unchanged again, as there’s no consensus on who should cut production in order to squeeze prices back up.