While drivers, shippers and airlines continue to bask in the glow of lower fuel prices, the nation’s oil industry is feeling pain in the form of diminished profits, reduced investment and slumping employment. Oil prices have been down in the range of fifty percent from last year. As reported by the Associated Press, this has produced a wave of corporate moves, all of which are, all things being equal, reducing economic growth.
In late July, Exxon Mobil announced that it cut spending by more than one point five billion dollars during the second quarter while Chevron announced that it is laying of fifteen hundred workers. Exxon Mobil’s profit recently fell to its lowest level since the recession. Royal Dutch Shell recently announced that its profits declined twenty five percent during the second quarter and that it would cut its global workforce by sixty five hundred.
Energy service companies like Halliburton and Baker Hughes also revealed additional layoffs during recent quarterly filings. It could get worse for these firms and others. Iranian oil is poised to return to the global market after years of sanctions, China’s growth has slowed in recent years, and much of Europe continues to struggle economically.
