The Trump Administration has announced economic sanctions against Iran "targeting at least 16 individuals and entities for supporting what it said was 'illicit Iranian actors or transnational criminal activity'." These particular sanctions includes freezing any US banking system interaction as well as US assets. Just yesterday, it was announced that Iran was complying with the set nuclear deal; however, these sanctions are being pushed on the basis of "breaking the 'spirit' of the deal" with the threat of additional to come should things not turn around. These individuals "had backed Iran's military or Iran’s Islamic Revolutionary Guard Corps (IRGC) by developing drones and military equipment, producing and maintaining boats, and procuring electronic components, according to the US."
France Bans Fossil Fuel Vehicles
French President Emmanuel Macron's environmental appointee, Nicolas Hulot, has his eyes set on quite a goal for the country in 2040. Over the next 33 years, France is planning to become carbon neutral by banning the market of fossil fuel vehicles which make up 96.5% of the French market. This announcement has caused a stir in many of France's main manufacturing brands, who now plan to accelerate their plans of at least a hybrid model if they haven't already done so. However, in order for the country to become completely carbon neutral, it'll be more than just vehicles - electricity generation and other carbon activities will have to find alternatives. This all comes in an effort to further support the Paris Climate Accord as well as the explicit statement that President Trump's decision to withdraw was a key factor in this plan's development.
Oil Futures Fall into Bear Market
Stubborn inventory both at home and abroad are giving analysts reason to believe that this could just be another "summer of cratering" for the oil and gas industry. Reports of increased Libyan production to 900,000 bbls/day, "it's highest level in four years", along with increased US production and high inventory levels have caused prices to return to the low $40's. This price is critical for many E&P companies here at home - as this is the breakeven for many regions throughout the states. Another telling sign? Oil futures have declined by 20% from January's high and entered into a bearish market. This may not cause an immediate reaction by oil & gas operators, but could create a significant impact for 2018 drilling schedules.
Vitality of Texas Oil & Gas Industry
Oil and gas has long been a key industry promoting economic growth nationwide - even globally. However, here in Texas, the industry has a significant impact on multiple factors from city/state revenue to overall employment. The uptick and seeming stability above $40/boe from last August has increased the nation's rig count and, in turn, production, employment, and growth. Nationwide, the Permian Basin out in the west of the state accounts for 40% of the total rig count and 55% of the industry's jobs nationwide. Over the past few months, the steady increase in rig count has increased jobs by 3,300 in the region with 72% of that being in the service sector. This growth, layered with higher priced production hedges and increased nation exports will allow the price of oil to continue to rise, at least through year end.