Governments are pushing oil and gas producers to increase output, with prices hovering around $100 a barrel amid a worldwide supply shortage, writes Reuters.
The shortage of workers limits how much producers in the U.S. and Canada can increase oil output as governments try to find ways to offset the effect of lost Russian barrels following the invasion of Ukraine.
Oil workers left the industry after the COVID-19 pandemic started. The U.S. unemployment rate has fallen to 3.6%, but there are still roughly 100,000 fewer oil and gas workers in the country than before the pandemic.
"At a job fair in a place like San Antonio, pre-COVID, maybe 200 people would show up. Now it's 50 or 100," said Andy Hendricks, CEO of Patterson-UTI Energy Inc PTEN.
Fewer skilled workers are willing to travel to the remote Canadian oil sands region for turnaround season, said Terry Parker, executive director of the Building Trades of Alberta, because companies no longer pay a significant enough premium for the inconvenience.
Parker said oil sands labor rates ranged from C$30 ($23.78) an hour for less-skilled workers to C$50 an hour for high-skilled workers.
According to the Bureau of Labor Statistics, average hourly wages in the U.S. oil and gas extraction industry are still below pre-pandemic levels, currently estimated at $45.45 an hour for February 2022 versus $48.37 an hour in February 2020.
Photo by satheeshsankaran via Pixabay
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.