Oilfield Services and Equipment Job Losses Exceed 100,000

U.S. oilfield services and equipment (OFS) lost approximately 2600 jobs in August according to preliminary data from the Bureau of Labor Statistics (BLS), the lowest total since the onset of the COVID-19 pandemic in March 2020. The U.S. economy added 1.4 million jobs in August and the unemployment rate fell to 8.4%.

The monthly Oilfield Services and Equipment Employment Report report, compiled and published by the Petroleum Equipment & Services Association (PESA), shows total job losses due to pandemic-related demand destruction reached 103,420 in August. OFS employment is down more than 121,000 jobs since August 2019 and is at its lowest point since March 2017.

Using BLS data, PESA, in consultation with researchers from the Hobby School of Public Affairs at the University of Houston, estimates OFS sector jobs in the U.S. dropped from 764,189 in February to 660,170 in August, a decline of 13.5%. Losses were heaviest in April, totalling 59,306 jobs, the largest one-month decline since at least 2013.

OFS employment year-over-year fell from 781,946 jobs in August 2019 to 660,770 in 2020, a dip of 15.5%. The jobs lost represent annual wages of approximately $13.1 billion.

OFS job losses slowed in August as companies began taking steps to restart oil and gas production. While the worst of the cutbacks appear to be behind the industry, considerable uncertainty about the future remains; a surge in COVID-19 cases could derail the economic recovery and suppress demand.

PESA analysis of Small Business Administration data found that approximately 180,000 OFS jobs were supported by loans from the Paycheck Protection Program.
According to PESA’s analysis, the following states have lost 4000 or more OFS jobs in 2020: Texas 59,000; Louisiana 10,200; Oklahoma 9200; Colorado 5000; New Mexico 4500; California 4500; and Pennsylvania 4400.

SOURCE: The Weekly Propane Newsletter, September 10, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.