Oil and gas producers in the region expect more financial pain and more job cuts this year, according to a Kansas City federal reserve bank survey.
Firms don’t expect drilling to become profitable again until next year, according to Chad Wilkerson, vice president, economist and Oklahoma City branch executive at the Federal Reserve Bank of Kansas City. On average, they said they would cut employment 22 percent this year.
“The average oil price firms say they need to be profitable in active fields dropped to $51 per barrel in this survey from $60 last fall, but firms on average do not expect that price to be reached until well into 2017,” Wilkerson said in a statement. “As a result, many expect large job cuts in 2016.”
The bank’s region includes Kansas, Colorado, Nebraska, Oklahoma and Wyoming; the western third of Missouri; and the northern half of New Mexico.