Employment in the U.S. oil and gas industry is set to rebound in the coming years and surpass pre-Covid levels, according to new research by Rystad Energy.
The company noted that the total number of jobs in 2027 is expected to hit 1.09 million, which it highlighted was a “marginal increase” from the 1.07 million in the sector pre-Covid in 2019. U.S. oil and gas employment is set to expand by 12.5 percent this year, rising from around 863,000 to 971,000 total jobs by the end of 2022, according to Rystad.
The company pointed out that the U.S. oil and gas sector lost nearly 200,000 jobs during the pandemic, or 20 percent of the total workforce. Almost half of the jobs have already been recovered, however, on the back of high oil prices and bullish market sentiment, Rystad outlined.
“Fueled by a rapid rise in oil prices amid a better than expected demand recovery and the supply constraints brought on by Russia’s invasion of Ukraine, the U.S. labor market seems poised to benefit and continue on a growth trajectory,” Sumit Yadav, an analyst with Rystad Energy, said in a company statement.
Wages, Inflation Impact
Operators are feeling the impact of inflation on their bottom lines, meaning wages are unlikely to grow significantly this year, according to Rystad, which stated that wage growth across the industry is expected to be a “relatively meager” 2.9 percent in 2022.
The average wage across the industry increased by nearly 6.3 percent in 2021, compared to a 2.9 percent increase in 2020, Rystad highlighted. The wage growth in 2021 was primarily concentrated in low-skilled trades with a lower starting salary, however, Rystad revealed. Wage growth remained “elusive” for highly skilled oil and gas roles, such as petroleum engineers and geoscientists, Rystad said.
The outlook towards the middle of the decade is said to be “rosier”, with wage growth in 2024 projected to approach 10 percent.
Rystad highlighted that its employment forecast is based on its oil price scenario in which the WTI oil price averages $106 per barrel this year, $70 per barrel in 2023 and $50 per barrel towards 2025.
At the time of writing, the price of WTI stood at $110.03 per barrel. This time last year, the WTI price stood at $63.36 per barrel. The U.S. Energy Information Administration’s (EIA) latest short term energy outlook, which was published on May 5, projects that the WTI spot price will average $98.20 per barrel this year and $93.24 per barrel in 2023.
As of May 18, 7.41pm CEST, there have been 81.8 million confirmed cases of Covid-19 in the U.S., with 992,667 deaths, according to the latest figures from the World Health Organization (WHO). As May 6, a total of 570.1 million vaccine doses have been administered in the country, WHO data shows.
The weekly Covid-19 case peak in the U.S. was seen in the week commencing January 10, 2022, at 5.6 million cases, WHO figures outline. Weekly Covid-19 deaths in the U.S. are shown to have peaked in the week commencing January 11, 2021, at 23,289.
In the week commencing May 9, weekly Covid-19 cases in the U.S. came in at 605,547, according to the latest WHO data. During the same period, weekly Covid-19 deaths in the U.S. came in at 1,849, WHO figures show.