With 18 month high crude oil prices holding through January and even prices on the horizon, U.S. oil & gas producers continue to add jobs.
According to data provided by the U.S. Bureau of Labor Statistics (BLS), Extraction jobs increased by 100 to a total of 177,400 in January, while oilfield support services jobs increased by 600 positions to 195,200 in December.
While not 'boom' numbers, these are confidence inspiring.
The report then went on to say that U.S> non-farm payrolls increased by almost 230,000 jobs last month - the largest gain in four months despite unemployment rising 1/10th of a percent to 4.8%.
By the numbers, energy companies cut more than 160,000 jobs over the past 24 months as the number of rigs drilling for oil tumbled from 1,600+ in October 2014 to a staggering six-year low of less than 320 in May. (according to statistics from Labor and energy logistics firm Baker Hughes Inc.)
Naturally, these cuts paralleled the largest price drop in some 50 years, with crude futures plummeting from $107 a barrel in June of 2014 to a dismal $26 per barrel in February of 2016.
While we are still nowhere near the $100+ per barrel in 2014, crude prices have doubled since that February 2014 low, with prices currently sitting at approx $54 a barrel. A key factor in this increase has been OPEC / non-OPEC producers agreeing to reduce output during the first half of 2017 in efforts to stem the oversupply.
According to the National Australia Bank said in a note on Friday, "We now expect oil prices to average around the mid to high $50s in Q1 and Q2, before reaching the low $60s by end-2017 and stabilizing at around those levels in 2018."
Analysts said U.S. exploration and production (E&P) companies are expected to respond to these higher prices by adding new drilling rigs, with even more spending expected on drilling over the next year or two.
Financial services firm Cowen & Co said in a statement this week that "capital expenditure tracking showed 31 exploration and production (E&P) companies planned to increase spending by an average of 36 percent in 2017 over 2016."