Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Uranium Stocks
Uranium Price
Our RSS Feed

Uranium Updates

Enter your email address:

Follow Us on Twitter
« Laramide: Up 2.52% Today! | Main | Cameco falls on leak! »
Thursday
May222008

Uranium: Dependent on Oil?

Oil pumps 23 May 2008

After taking a severe beating the uranium sector is showing signs of a recovery. Scanning the radar there appears to be a number of differing opinions tabled in support of nuclear power, one of which is the high cost of oil.

There is a school of thought that argues that the price of oil is set go even higher, to $150/barrel and beyond as demand for energy continues to climb. Another argument is that the United States is about to enter its summer driving season putting more pressure on the supply side. Throw in the ‘Chindia’ factor where China and India plus the other emerging economies are expanding at a rapid pace and the projections become believable. On the supply side there are no new world-class discoveries to meet this projected demand. So the word is pile into oil producers and load up with oil futures etc.

Now, if the oil price is going to the moon then the search must be on to find an alternative, please don’t mention ethanol, the idea of burning food just does not do it for us. However, yellowcake does do it for us, as we are firm believers in the nuclear future. As we know, nothing goes up in a straight line, as evidenced with gold recently, when it pushed up through $1000/oz only to experience a pull back to the $850/oz level. The same could happen to oil, and there are analysts calling for oil to drop from its current historic high and return the $80/barrel level. Lets assume that they are correct. If oil does experience a pull back to lower levels will the interest in uranium wane? Do we don our hard hats once again and retreat to the bunker? In our humble opinion oil would have to drop back an awful long way before it could displace nuclear energy and just where is this oil and what about the environmental problems caused by burning oil?

Oil is influential but only in terms of a sideshow; the future of uranium is firmly founded on the fundamentals that support it and not the daily oscillations of an almost spent fuel. Although we agree that the fact that oil is running out is a major factor.

To recap, the world still has 433 nuclear plants up and running, 30 odd being constructed, and almost 300 in the pipeline. No doubt that China will become the front-runner and build nuclear plants at record-breaking speed just as China demonstrated by building the worlds largest airport in record time. As these construction programmes begin to roll it will become clear just how much important uranium is.

The question now is have we got the patience to wait for these things to happen and the investment community to recognise the importance of uranium and then follow through with their hard earned cash? We think so, and that is why we have not sold any of our uranium stocks during this torrid time for the uranium sector.

Going forward it will be volatile so hold on tight to what have purchased as to sell now will be to give someone else a real bargain, probably us!

If you are new to this web site and wish to receive our free newsletter regarding investment in uranium stocks and updates regarding uranium, then please click here to subscribe.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (8)

Just wanted to point out the uranium chart of URZ amex exchange. It has gone from $2 to $3 over the past month, and volume looks good on the way up , and light on the retracements. MACD and histo went positive, and it looks like a bottom may have been put in on this one. I am waiting for a bit more downside, and weatching for light volume and maybe the slow stoch to bottom ...just an f.y.i. for uranium intersts. NIce article too, thanks

May 23, 2008 | Unregistered CommenterRobert

How can one influence the Chinese government to build SAFE nuclear power stations is the question (along with : how safe are the nuclear power stations they currently have?)

The drop in the uranium sector (one presumes that you were writing ironically when you wrote of this "torrid [!] time" for the uranium sector): seemed to begin with an earthquake in Japan where authorities had "cleverly" allowed a reactor to be built right on top of a fault line... The "People's" Republic of China has long shown callous disregard for the well-being of its population and, indeed, for human life, as is evidenced in the death rate amongst its coal miners.

Note that rate. Note also how lousy the construction quality of the schools in Sichuan was, relative to buildings in which the communist bureaucrats "worked". Life is cheap in China, compared to what it is in today's western world (albeit we proved in the 20th century the same disregard for human life and well-being). The Chinese authorities would simply shrug their shoulders were a million or three or five to die due to a mega-Tchnernobyl type accident. BUT the rest of the world would put an immediate halt to any reactors currently in construction as well as to all planned ones. Some existing ones might be closed, even in France.

Ultra-fast construction, you promise? Be careful as to what you promise, as to your priorities! Do you really WANT ultra-fast construction,of reactors whose quality might be comparable to that of the dozens or hundreds of schools in Sichuan that collapsed on the children inside them, killing almost all of them, while the bureaucrats went unscathed?

The biggest factor EVERYWHERE, not just China, has to be safety: without ultra-safe (whether ultra-fast or not) nuclear power reactors, there will be zero market for uranium.

SAFETY governs profitability, in this instance, and should in all instances. But... how does one persuade Chinese authorities, at all levels of governance, that safety must be their number one priority? Please answer.

May 23, 2008 | Unregistered CommenterNeil Bishop

Neil, very good post. There is,however, a mass-awakening that America's liberal, fear-monger mentality may be it's own undoing.Bush's FIRST initiative in office was to get some drill sites going in the enviromentally sensitive
parts of Alaska.Greenies mobilzed within days and eventually put the kabash on it.So when our electricity is eventually rationed, we can sit around the table with candles i guess,and look through our coffee-table books showing all the beautiful undisturbed lands in Alaska.

May 24, 2008 | Unregistered CommenterDana Nini

neil; i believe you are being unduly focused on one propagandized portion of the nuclear issue. there are going to be accidents, everywhere, all the time; the idea is to learn and go forwaard. china has not had a reported incident, while the u.s. has, russia has,etc. while you wory about safety, construction goes on with russia/china collaborating...russia and opec nations signing working reements, france and turkey, viet nam and russia. i can't picture such an industrious nation as china skipping steps into the new nuclear future, they are innovating.

May 26, 2008 | Unregistered Commenterrichard mruz

Neil, the Japanese built a NP on a faultline, then a earthquake, 8 people died because of it, but still the NP was as save as houses and no meltdown or any concerns. That blows your concerns about saftey out the window.
With 175000 people dying in China of polution related deaths each year i feel we should put our concerns to better uses.... Get these NP,s built asap.

May 27, 2008 | Unregistered CommenterDawson Miller

Shucks, I sent a detailed reply to my respondents, only to have an "error" message appear when I clicked on "Submit Comment"--the Uranium Letter's web site did not function. Wasted nearly an hour of my time. Uranium Letter, you owe me $300.00. Neil

May 27, 2008 | Unregistered CommenterNeil Bishop

Neil, We dont know what happened to your detailed reply, but if you send it again we will publish it.

May 28, 2008 | Unregistered CommenterUranium Stocks

I thought this might be going to be an article pointing out that digging up uranium ore, and processing it through to fuel rods, demands a lot of oil-based products, especially diesel. As the price of oil is reflecting the lack of supply of crude compared to the run-away demand, it seems likely that there will be a deadly embrace at some stage in the not too distant future, where you can't get the uranium for nuclear power because there isn't enough diesel available. see www.peakoil.org.au/news/index.php?does_nuclear_energy_produce_no_co2.htm

June 1, 2008 | Unregistered CommenterDave Kimble

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>