Tough times for services industries

Service companies are especially vulnerable when oil prices fall, as orders dry up and they have little to hedge with in the short term

And their clients are also in a bind, unable to make the books balance with contracts signed when the oil price was higher. So they are deferring projects, cutting capex and consequently cancelling contracts with the loss of tens of thousands of jobs collectively.  While this suggests a period of high oil prices is on the way in four or five years, for the time being it is belt-tightening all round, and redundancies and write-downs have dominated the second-quarter results for the service companies. To ward off the worst effects, the second and third largest in their field – Halliburton and Baker Hughes – last year announced a tie-up which they hope to close no later than 1 December 2015 cre