The oil industry shed 51,000 jobs in March. And things look set to get worse

The oil and gas industry shed nearly 51,000 drilling and refining jobs in March, a 9% reduction that is likely to get worse as futures prices fell into negative territory Monday.

March’s job losses rise by 15,000 when ancillary jobs such as construction, manufacturing of drilling equipment and shipping are included, according to BW Research Partnership, a research consultancy, which analyzed Department of Labor data combined with the firm’s own survey data of about 30,000 energy companies.

“We’re looking at anywhere between five and seven years of job growth wiped out in a month," Philip Jordan, the company’s vice president said in an interview. “What makes it sort of scary is this really is just the beginning. April is not looking good for oil and gas."

The price on the futures contract for West Texas crude that is due to expire Tuesday fell into negative territory -- minus $37.63 a barrel -- with the pandemic bringing the economy to a standstill and American energy companies running out of room to store oil. The price on the futures contract due a month later settled at $20.43 per barrel.

An unprecedented output deal by OPEC and allied members a week ago to curb supply is proving too little too late in the face a one-third collapse in global demand. With no end in sight, and producers around the world continuing to pump, that’s causing a fire-sale among traders who don’t have access to storage.

BW Research projects oil and gas jobs could decline by as much as 30% in the first quarter of 2020.

The industry has faced the twin shocks of the coronavirus crippling demand with stay-at-home orders coupled with an oil-price war between Russia and Saudi Arabia that led to a glut and sent the price of oil spiraling to historic lows, leading U.S. companies to idle drilling rigs.

The oil industry can’t cut oil jobs fast enough to keep up with a market that Halliburton Co. described Monday as being in free fall. For every rig or fracking crew that gets cut, roughly two dozen field workers lose their jobs.

The cuts range from giants like fracking-services provider Halliburton, which last month furloughed 3,500 workers at its headquarters in Houston, to Oklahoma-based Recoil Oilfield Services LLC, which cut 50 workers after losing its work with shale giant EOG Resources Inc.

Oilfield servicers are hardest hit, as roughly 20 companies are employed at each well site. As the explorers who own the wells file for bankruptcy, their pain spreads throughout the supply chain.

“Oil and gas has suddenly become a hobby that only the best capitalized companies in the industry are going to be able to continue to enjoy engaging in," said Dan Eberhart, the chief executive of oil-field services company Canary Drilling Services, which has laid off about 200 people and implemented across-the-board salary cuts. “A hefty amount of the jobs in oil and gas are provided by oilfield service companies-and those companies are weaker than the oil companies and are going to start disappearing quickly."

BW Research released a report last week that showed clean energy workers -- such as solar panel installers and electric vehicle manufactures -- lost more than 106,000 jobs last month. Overall, energy-related jobs fell last month by more than 303,000, the firm said.