Global Oil Job Cuts Top 250,000

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by David Wethe and Saleha Mohsin (Bloomberg) – The number of jobs gutted from oil and gas companies around the world has now passed the 250,000 mark, with still more to come, according to industry consultant Graves & Co.

“I was surprised it’s gotten this far,” John Graves, whose Houston firm assists in oil and gas deals with audits and due diligence, said Friday in a phone interview.

The industry has idled more than 1,000 rigs and slashed more than $100 billion in spending this year to cope with oil prices that have fallen by more than half since 2014. Oil services, drilling and supply companies are bearing the brunt of the downturn, having accounted for 79 percent of the layoffs, according to Graves.

U.S. oil producers resumed their pullback on drilling this week, idling 10 rigs in an effort to cut costs and stem the rising tide of crude supplies that’s gutted oil prices to about $40 a barrel. The cuts extended a five-year low in activity after the two rigs added last week proved to be a short-lived pause in three months of downsizing.

Glimmer Of Hope Overseas

With almost half of its exports and one in nine jobs related to oil, persistently weak crude prices have sent ripples through oil producing nations including Norway. This has prompted Norway’s central bank to deliver three rate cuts since December, leading to a weakening in the krone that is helping exporters. The bank has signaled the possibility of more easing in the coming year.

Norway’s economy grew more than estimated in the third quarter as a weaker krone boosted exports.

Seasonally adjusted gross domestic product, excluding oil, gas and shipping, grew 0.2 percent, after expanding a revised 0.3 percent in the second quarter, Statistics Norway said on Tuesday. Mainland growth was seen at 0.1 percent in a Bloomberg survey. Total output grew 1.8 percent.

“Obviously the krone is doing its job, we see that in the lift in exports,” said Magne Oestnor, an analyst at DNB ASA in Oslo. “That’s one of the main shock absorbers that we currently have, it’s doing its best to improve the competitiveness of Norwegian companies. Exports are growing steadily in a global environment that is looking gloomier.”

The krone has lost 9.5 percent against the euro and 28 percent against the dollar over the past year, helping hold up key parts of the economy. The currency strengthened as much as 0.6 percent against the euro and was trading at 9.2479 as of 11:10 a.m. in Oslo.

While unemployment remains at enviably low levels compared to the rest of Europe, it reached 4.6 percent in August, the highest level in about a decade.

Exports jumped 4.6 percent in the third quarter, while petroleum and shipping industry output increased 7.5 percent, the statistics agency said. Consumer spending was little changed.

While DNB’s Oestnor still sees the central bank cutting rates next month “on the back of dovish communication in September,” Nordea Bank AB sees it differently. With mainland growth beating estimates, it “strengthens us in our conviction” that Norges Bank will stay on hold the rest of the year, said Martin Enlund, chief analyst at Nordea.

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