Wages for US oil workers dropped for a second consecutive month as weaker commodity prices trigger a slowdown in the shale patch.
(Bloomberg) — Wages for US oil workers dropped for a second consecutive month as weaker commodity prices trigger a slowdown in the shale patch.
Average hourly earnings for front-line oil-and-gas workers fell 0.7% in June from the previous month to $42.80, according to a Labor Department report released Friday. The slowdown for shale workers bucked an overall national trend in the economy that saw wages rise at a solid clip. Still, compared with a year ago, oil pay is up 7.5%.
The development is welcome relief to the explorers looking to control their costs after an 8% drop in oil prices and a 69% slump in natural gas over the past year. While the shale patch has started to see record costs come down in key categories like pipes and rigs, one of the last remaining sticking points has been labor costs.
“We’re seeing labor being still a bit tight,” Vicki Hollub, chief executive officer for Occidental Petroleum Corp. said Thursday on an earnings call. “We’re not seeing as many people wanting to change jobs. It’s just a matter of getting the skills that we need in the field.”
The jobless rate in oil and natural gas rose to 2.7% in July on an unadjusted basis, government figures show. That compares with an unemployment rate of 0.8% a year earlier and is still lower than the national jobless rate. Unemployment in the oil patch remains historically low overall, at roughly half the rate of its own average of 5.8% dating back to 2000.
The overall number of workers employed in the industry remained steady at 118,000 in July. That’s still down 4% from last year’s peak.
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