The American petroleum industry is devastated by huge layoff numbers, having lost thousands of workers and sliced through billions of dollars in spending since the collapse in oil prices and far-reaching industry consolidation. The shift could mark the end of the hypergrowth in output that launched America to the world's leaders.
Conversely, the Organization of Petroleum Exporting Countries and its allies in OPEC+ are raising output to regain lost market share to the U.S. and others. OPEC+ stated Sunday it would boost production by 137,000 barrels per day starting in October.
Those decreases have cut global oil prices by nearly 12% this year, just short of break-even for the majority of U.S. producers. That has bred mounting budget reductions and job cuts, which experts say can strangulate future drilling. If drilling slows or declines, it can undermine the U.S.'s share in international oil markets and render President Donald Trump's goal of energy dominance harder to achieve.
ConocoPhillips, the nation's third-largest oil producer, also indicated last week that it would cut as much as 25% of its employees. That followed Chevron announcing that it would cut 20% of its employees, or some 8,000 workers. SLB and Halliburton have also reduced their numbers.
A Reuters estimate calculated that 22 US-listed oil majors such as Occidental Petroleum, ConocoPhillips, and Diamondback Energy cut their capital spending by $2 billion, but industry giants Exxon and Chevron were excluded from this estimate.
Along with the suffering, U.S. oil drilling rigs-a significant indicator of future drilling-are off by about 69 to 414 this year, according to Baker Hughes. Analysts state that oil prices need to see the $70 to $75 per barrel mark to boost drilling activity again. U.S. West Texas Intermediate futures spot trading went on at $62.15 per barrel on Monday.
For the week up to the close of late August, lower 48 production averaged around 13.4 million barrels per day, short of last December's record at 13.6 million.