Sinking oil prices put energy jobs at stake

Workers connect drill bits and drill collars, used to extract natural petroleum, on Endeavor Energy Resources LP's Big Dog Drilling Rig 22 in the Permian basin outside of Midland, Texas.
Brittany Sowacke | Bloomberg | Getty Images

Although plummeting oil prices are considered an overall benefit to the U.S. economy, not everyone in the country will enjoy benefits. Oil and gas jobs are at stake, reports the Wall Street Journalan unanticipated downturn after the industry became a leading beacon of job growth during the Great Recession.

If oil remains around $56 a barrel until the second quarter of 2015, firms that supply support services for oil and gas companies may cut 40,000 jobs by the end of next year, according to Tom Runiewicz, an IHS Global Insight economist. Equipment manufacturers risk 5,000 to 6,000 jobs.

U.S. crude futures ended below $55 a barrel on Friday.

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Texas and North Dakota reaped the benefits while driving 90 percent of the country's growth in oil production in the past half decade. But they are now expected to face the bulk of the employment slump, the Journal said.

"While the rest of the country looks to benefit from cheap oil, Texas could be headed for recession," wrote Michael Feroli, chief economist at JP Morgan Chase, in a recent note to clients.

Exploration and production companies are slowing down to cut costs and search for savings. The count in drilling rigs are expected to drop off rapidly in the first quarter of the new year.

Read the coverage on the Wall Street Journal.