Earnings season starts, meaning energy professionals should see fewer job cuts
Published: 19 Jul 2016 By Grace Kimberley
Energy companies have begun reporting their second-quarter earnings, which doesn’t seem as daunting a task as when the worst of the recent oil crisis occurred. However, there are still many assumptions and concerns about what this means for energy professionals currently working in the industry. This is a vital revelation for industry experts to predict when remission will begin, but also how fast the market is going to recover.
Energy giants involved in the reporting include the largest oil companies in the world: Schlumberger and Houston’s Halliburton, who are, as expected, two of the most important inclusions in the reporting. This means that for many energy professionals, this week is going to be a week of nail-biting uncertainty.
So what does this mean for the industry? What can energy professionals expect aside from the result?
Some industry experts believe that the market should expect to see more losses in the second half of this year due to the amount of oil rigs that were shut down at the start of 2016. This was a result of the difficulties in the market and it is still having huge effects on oil companies at present. Despite this, the decrease in oil rigs halted in June, which means the effect this will have on energy companies following on from this is still unpredictable.
There is good news on the horizon. According to various sources, the market should be confident in there being fewer job cuts than when the last reports took place, mainly because we seem to be ‘over the worst’ with the oil industry, which will reflect in how may job cuts take place. Reductions may still be announced as energy companies look towards the end of this year, but it would be detrimental to these giants to cut so many jobs that they can’t operate efficiently.
There might be less job cutting, but there is also a possibility of more cost cutting. Energy companies will absolutely want to save on funds wherever possible after the hits they have all taken in the earlier parts of this year. Regardless of the recent change in oil prices, these companies will want to see more consistency in prices before expanding their investment. This could even be pushed back until 2017.
There will most likely be a sense of “We spoke too soon” when it comes to oil prices. Despite the hopeful increase of crude oil prices since their worst earlier this year, these are expected to slump back down periodically, meaning more feelings of shattered expectations within the industry. The good news is that the market is regaining some level of strength, meaning that long term affects over the next 2 years are not looking to be as catastrophic as expected for the oil industry.
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