The oil-price collapse will certainly have a powerful effect in many industries. In the oil & gas energy and exploration sector, companies are already preparing for a long winter. Industrial Motor Power Corporation, a leading new-surplus and used power gen company, has already witnessed downward trends in domestic O&G—a prophetic move guaranteed as a precursor to future cuts if prices don’t recover.
“Oil & gas is cutting back on everything,” notes Gregg Bare of Mustang CAT based in Southeast Texas. “We’re getting a lot of cancelations, and delayed deliveries [on power generation equipment].”
Individual rigs have recently been canceling orders in the triple-figures, and this trend is likely heralding in additional cost cuts yet to come. Unfortunately, these moves will almost certainly trickle down the employee chain unless prices jump back up in a short term.
According to Mine K. Yucel, the Sr. VP and Director of Research at the Federal Reserve Bank of Dallas, Texas’ O&G sector could see an estimated 15,000 jobs lost in energy production if the low oil prices endure for much longer. That said, the oil industry as a whole certainly knows how to weather these storms.
When asked about similarities between the current collapse, and the drop of 2008, Mr. Bare states “It’s a struggle for everyone, but the oil field is like that; it’s cyclical. A lot of smaller businesses might disappear, but everything will bounce back. It’s just a matter of time.”