Report: Extraction Jobs In US Grew To 177,400 In January

U.S. oil and natural gas producers added jobs in December 2016 and January as drillers continued returning to the well pad with crude prices holding near 18-month highs, according to U.S. jobs data on Feb. 3.

Oil and gas extraction jobs increased by 100 to 177,400 in January, while support services jobs increased by 600 to 195,200 in December 2016, its second increase in a row, according to U.S. Bureau of Labor Statistics (BLS) data.

The energy data was contained in a Labor Department report that also said U.S. non-farm payrolls increased by 227,000 jobs in January, the largest gain in four months, while the unemployment rate rose one-tenth of a percentage point to 4.8%.

The BLS only has support services jobs data through December, while oil and gas extraction data is available through January.

Energy firms cut more than 165,000 jobs over the past two years as they slashed the number of rigs drilling for oil from a peak of 1,609 in October 2014 to a six-year low of 316 in May, according to statistics from the Labor Department and energy logistics firm Baker Hughes Inc.

Those job cuts came during the most extensive drop in oil prices in a generation, in which U.S. crude futures collapsed from more than $107 per barrel (bbl) in June 2014 to about $26/bbl in February 2016 due to a global oil glut and lackluster demand.

Crude prices have since more than doubled from their February low to about $54/bbl as OPEC and non-OPEC producers agreed to reduce output during the first half of 2017 in an effort to stem the oversupply.

Analysts said U.S. E&P companies responded to those higher prices by adding about 250 oil rigs over the past eight months, with even more spending expected on drilling over the next year or two.

Analysts at Cowen & Co said during the week of Jan. 30 in a note that capex tracking showed 31 E&Ps planned to increase spending by an average of 36% in 2017 over 2016.

That expected spending increase in 2017 follows an estimated 45% decline in 2016 and a 37% decline in 2015, Cowen said, according to the 65 E&P companies it tracks.