More than 90,000 workers in the US oilfield services industry lost their jobs as pandemic induced oil demand plunge forced companies to cut their workforce. However, hiring in the industry increased in November by 0.4% as 2,665 new employees were added to the workforce. The demand for drilling services slumped as oil prices plummeted earlier in the year, which pushed many oilfield services companies into bankruptcy as they incurred huge losses.
The drastic fall of prices and the panic triggered by coronavirus pandemic has led to a global oversupply and a demand drop all through the year. The crisis is the worst seen by the industry and the price drop is one of the steepest since World War II. Oil demand is expected to struggle to return to pre-pandemic levels as travel demand declines and work from home arrangements continue.
The crude oil production in the US is projected to fall to 11.34 million bpd, declining by 910,000bpd, which is sharper than the previous estimate of an 860,000bpd drop due to the Covid-19 pandemic. The crude oil production, however, recovered from the record lows of May, on the back of news of a potential vaccine for coronavirus.
The Covid-19 pandemic has impacted refinery margins as demand for refined products continues to fall. Oil majors across the world have reduced refinery operations leading to approximately 1.4 million barrels per day of refining capacity closures. Refinery utilisation rates are expected to continue to remain low at least until late 2021.