In Oil & Companies News 10/10/2016
One of the biggest drags on the U.S. economy appears to be lifting anchor, potentially offering a small bonus in the coming months.
After shedding jobs for 23 straight months, energy companies finally ended that streak in September by holding employment steady. As oil prices stabilize the energy sector may also be primed to start growing again.
In the third quarter that runs from July to September, energy companies added 95 drilling rigs to bring the U.S. total to 425, according to energy services firm Baker Hughes. Although it’s well below the 614 rig count one year ago, the increase was the first since early 2014.
The reversal of fortune largely owes to a rebound in oil prices to the $50 range after they sank to a 11-year low of close to $30 toward the end of 2015.
Blindsided by tumbling oil prices in 2014 and 2015, American energy producers had slashed spending and cut more than 220,000 jobs — one-fourth of all the industry’s workers. The sudden reversal put a big dent in overall U.S. corporate profits and contributed to a slowdown in U.S. hiring.
Read: These are the skills you need to find a job in modern America
Higher retail gas prices could pose a small burden to consumers, but the cost of fuel is still quite low, especially compared to a few years ago.
A gallon of regular gas cost an average of $2.22 in September, down 40% from $3.69 in June 2014, figures from the Energy Information Administration show. In 2008, gas prices briefly topped $4 a gallon.
“With sizeable declines in energy prices now largely behind us, the slowdown in employment will not continue,” economists at Barclays wrote in a note Friday.
Source: MarketWatch
