Kern County oil producers do not expect the recent decline in barrel prices to result in widespread layoffs, though some said caution and reassessment of upcoming drilling projects may be in order.
Oil prices ended a 12-day slide Wednesday as traders began to view the downward trend as more reflective of rising supply than falling demand. Brent crude, the international benchmark underlying local prices, closed up 1 percent at $66.12 per barrel. The U.S. benchmark also edged up 1 percent on the day.
Local drillers big and small dismissed any notion employers in Kern would react by laying workers off by the thousands as they did in 2014, when prices fell steeply and remained low for years. Only in the past year have payrolls begun to recover amid what has become a historically tight labor market.
California Resources Corp., one of Kern's largest oil producers, said in a written statement Wednesday it has a "stable outlook" for employment and ongoing projects.
Local independent Chad Hathaway predicted the price decline will stem some capital investment projects and drilling activity — that "everybody's going to be a little cautious" — but emphasized the current price is sustainable for California oil producers.
"We're not talking a catastrophic drop," he said. "We're still at a good number."
Midway Sunset, a local grade of oil often seen as Kern's benchmark, closed 56 cents higher Wednesday at $61.75 per barrel. July's average was $71.30.
Hathaway saw the recent price decline as part of a broader sell-off, not a sign of market weakness.
"I don't think it's going to change hiring," he said.
At Kern oil producer Berry Petroleum Co. LLC, President and CEO A.T. "Trem" Smith described the recent price trend as just the latest of the industry's periodic down cycles.
While he intends to be prudent and pay attention to prices, Smith explained that the company's practice of operating out of cash flow largely protects it from having to scale back when prices fall.
"From a Berry perspective," he said, "we see continued growth … even in this environment."