Oil and gas continues game of limbo, as prices hit six year lows

How low can it go?

Oil dipped to a $40.80 a barrel Wednesday in prices not seen since spring of 2009, and it’s just more bad news for a struggling sector.

The President of the Canadian Association of Oilwell Drilling Contractors says there’s been about a 50 per cent drop in activity this year, contributing to thousands of layoffs.

Mark Scholz says their June forecast predicted these sinking numbers.

“What I think is very startling is that when you look at the number of active rigs that are working today, we are seeing similar activity that we saw in the mid-80s,” he said.

He says the plunge equals about 25,000 fewer jobs available on the rigs.

When prices eventually do bounce back, he explains, it’s going to be difficult to bring some of these people back into the field.

“The people that we are losing right now are not your junior, entry-level positions. These are now your senior, most trained, most experienced individuals, that are certainly now being impacted,” he said. “From a training perspective to bringing those individuals up through the ranks, mentoring them, getting them in those experienced, senior positions — when those senior positions leave, it’s when industry is certainly hurting when it starts to rebound.”

For now, it’s all about weathering the storm.

Scholz says we are going to see depressed activity rates going into the third and fourth quarters of this year, and 2016 is not looking much better.