Tens of thousands of energy jobs were lost in the first quarter of the year, according to a new report from the Dallas Federal Reserve.
The report, published on Friday, found that oil and gas companies shed more than 20,000 jobs nationwide during the first quarter of 2016 as companies cut spends and reduced activity levels.
“Given current oil and gas prices, it is likely that many companies will continue to face difficulties in the quarter to come and beyond,” the report said.
Head of the International Energy Agency’s Oil Industry & Markets Division Neil Atkinson said this week that global capital expenditure dropped by 24 percent in 2015 and is expected to drop another 17 percent this year, marking the first back-to-back annual declines since 1986.
Those capital expenditure cuts have dragged the U.S. rig count down to 443 rigs as of April 8, the lowest level on record since Baker Hughes began tracking data in 1949.
Concerns about global economic growth and Chinese stock market volatility sent oil prices diving 25 percent in early January, according to the Dallas Fed.
While prices have recovered since the beginning of the year, Brent crude prices have yet to surge past the $45 per barrel mark.
The International Energy Agency said in its most recent monthly oil report that global oil supplies eased by 180,000 barrels per day in February to 96.5 million barrels per day on lower OPEC and non-OPEC output.
However, February production levels still stood at about 1.8 million bpd above year ago levels after a slight drop in non-OPEC production was “more than offset” by larger OPEC volumes.
Natural gas prices have also hovered near multi-decade lows as unseasonably warm weather reduced demand during the winter.
Natural gas spot prices averaged about $2 during the first quarter, one of the lowest prices seen since the 1970s after adjusting for inflation, the Dallas Fed said.
OPEC members as well as representatives from Russia, Oman and Bahrain will meet in Doha on Sunday to discuss a potential production freeze plan.
A representative from Mexico will also attend but only to observe the meeting.
However, Iranian officials have insisted their country will not participate in a production freeze agreement, a potential sticking-point with other major OPEC producers including Saudi Arabia.
“Whether an agreement is reached or not, it remains unclear if the freeze would change the supply outlook for 2016 without Iran’s participation. The other countries are unlikely to significantly boost supply in 2016 and, in several cases, appear to be currently producing at very high levels,” the Dallas Fed said.
Iranian production posted the largest gain of any OPEC country in March after growing by 110,000 bpd month-over-month to 3.23 million bpd as the country looks to regain market share now that Western sanctions have been lifted.
Overall, OPEC production rose to 32.38 million bpd last month after adding 40,000 bpd as production growth in Iran, Iraq and Angola offset dips in the United Arab Emirates, Libya, Nigeria and Venezuela.