American drillers have restored less than 20 per cent of the oilfield services jobs lost due to the pandemic, with companies favouring investor returns over boosting output, according to a trade group.
“The main reason that hiring isn’t coming back faster is that companies are focused more on free cash flow, paying down debt and repaying investors than they are on boosting production,” said Kevin Broom, director of communications and research at the industry-funded Energy Workforce & Technology Council.
The companies that frack wells and make the equipment required to produce oil added 8,002 jobs in June after adding nearly 24,000 positions in the three months prior to that, according to an analysis of labor market data by the council. Still, the sector has only recovered 18,600 of the 102,000 jobs lost due to the pandemic, according to the report.
The slow rate of hiring in the U.S. comes as global oil markets are set to tighten significantly with the OPEC+ alliance unable to agree on a deal to increase production. Without more output, oil futures prices, which are up 50 per cent so far this year, could surge as demand continues to rebound from the 2020 slump.
“If production starts starts moving up, I would expect employment to as well,” Broom said.
© 2021 Bloomberg L.P.