Back to Work: Labor reports show bleeding has stopped in America's oil and gas fields

Energy CEO: We're in initial stages of a recovery

The pain in the U.S. energy sector — the biggest job cutter in both 2015 and 2016 — appears to be easing.

The U.S. jobs report for December offered further signs that employment is stabilizing in America's oil patch, which has seen mass layoffs throughout more than two years of low oil prices.

For the seventh month in a row, employment in the oil and gas extraction industry came in near or above 172,000, according to the Current Employment Statistics survey.

That trend is starting to show up in more comprehensive data from the Quarterly Census of Employment and Wages. The figures, based on census reports from all U.S. business establishments, showed employment in oil and gas extraction roughly steady at 175,000 positions in May and June, the last months for which data were available.

The extraction industry is one part of the country's oil and natural gas sector, which also includes drilling and support activities. Extraction jobs include everything from geoscientists and engineers to roustabouts and wellhead pumpers. It's a bellwether job category because steady employment in extraction can bode well for the other parts of the sector.

There is also good news when it comes to layoffs in the energy industry.

While job cuts by U.S.-headquartered energy companies surged 14 percent to 107,714 this year, more than two-thirds of those reductions happened in the first half of the year, according to global outplacement firm Challenger, Gray & Christmas.

In the second half of the year, about 20 percent of the roughly 30,500 energy layoffs were announced by companies focused on renewable energy such as solar power.

The latter part of 2016 saw oil prices stabilize in the $40 to $50 a barrel range as the Organization of the Petroleum Exporting Countries talked about cutting production. OPEC and other producers then agreed to do just that late last year.

"Oil companies may once again start to expand in 2017. Ironically, the only obstacle in their way may be a shortage of skilled workers," Challenger, Gray & Christmas CEO John Challenger said in the firms monthly report.

"When the last boom got underway, oil firms had the luxury of building their work forces amid high unemployment across the nation. Before the most recent downturn, drilling firms were already struggling to find workers."

In the years following the financial crisis, total U.S. employment in the oil and gas extraction, drilling and support services sectors more than doubled over a 10-year period to reach about 644,000 jobs at the end of 2014, according to a CNBC analysis of Bureau of Labor Statistics data.

With unemployment now at 4.7 percent, recruiters have warned that drillers and service companies could have a tougher time attracting workers to oil and gas fields.

"It's the one part of the equation that we're going to see tighten up," Patterson-UTI Energy CEO Andy Hendricks told CNBC's "Power Lunch" on Thursday.

That said, Patterson-UTI has been in "good shape" thus far, he added. The onshore contract drilling service company has hired back roughly 600 employees in recent months.

About 90 percent of the people it hired in October and September were returning employees. More recently, returning employees have represented about 80 percent of the hires.

It's important to note that employees in drilling and support services industries have been hit harder than extraction workers have. Service providers like Schlumberger, Halliburton and Baker Hughes have seen the biggest layoffs, because less drilling means less demand for their services.

The change in employment in the extraction sector over the last seven months has decreased to a degree that's within the Bureau of Labor Statistics' confidence interval, meaning that it's not been statistically significant. That is, the change from month to month has not been great enough to say with certainty that employment in oil and gas extraction has risen or fallen.