The oil and gas industry in 2016 has been shaken by the depth and length of the downturn in oil prices, and the job cuts that have followed this year. The oil price decline has been anything but a blip while half of the 20 biggest layoffs that have struck the sector since the downturn began occurred in 2016. West Texas Intermediate prices fell from more than $100 a barrel in mid-2014 to an average price of $42 per barrel year-to-date in 2016, forcing energy companies to revisit their staffing levels quarter after quarter as they sought to reduce costs. For workers in the oil and gas extraction and support activities industries, that means the hits have kept on coming.

Signs have emerged in the last few months, however, that the worst may be over. For the fourth month running, data from the US Labor Department show employment in oil and gas extraction holding roughly steady, after declining throughout 2015 and the first part of this year. The figures show a downward slope that's finally flattening (see below).

A recent Deloitte study shows more than half of oil and gas professionals, 59% of the 251 respondents, believe the recovery already has begun or will begin in 2017. While the current state of the market still leaves cost-containment initiatives a priority for oil and gas companies, executives nonetheless showed renewed confidence in an industry recovery. Executives pointed to expectations of rising prices, a return to increasing capital expenditures and headcount as drivers of their optimistic outlook. Their outlook was surely buoyed by OPEC's decision to cut 1.2 million barrels per day from its members' production starting in January 2017 which will reduce global oil supplies and lead to a drawdown in stockpiles in 2017.

Staffing Industry Analysts will monitor developments closely especially given the added economic uncertainty stemming from the US election and UK referendum decision to leave the European Union. How US and the UK develop trade with other countries will have consequences for visa and immigration laws. The result could be a significant disruption to the movement of talent globally which is vital for the energy industry as skilled engineers are needed on various projects at any time.

For more information on the current trends in the oil and gas market click here.