06/15/16
OilPrice.com

Uranium Prices Set To Double By 2018

With prices set to double by 2018, we’ve seen the bottom of the uranium market, and the negative sentiment that has followed this resource around despite strong fundamentals, is starting to change.

Billionaire investors sense it, and they’re always the first to anticipate change and take advantage of the rally before it becomes a reality. The turning point is where all the money is made, and there are plenty of indications that the uranium recovery is already underway.

It’s been a very tough few years for uranium. But it now looks like we’ve reached the bottom, and the future demand equation says there’s nowhere to go but up—significantly up.

Uranium analyst David Talbot of Dundee Capital Markets is forecasting 6 percent compound annual demand growth through 2020, which is enough, he says, to “kick-start” uranium prices up to and beyond 2007 levels. Morningstar analyst David Wang predicts prices will double within the next two years.

Mining Weekly expects “the period from 2017-2020 to be a landmark period for the nuclear sector and uranium stocks, as the global operating nuclear reactor fleet expands.”

“It’s impossible to find another natural resource that is so fundamentally necessary and yet has carried such negative sentiment as uranium. The market has been skewed by negative sentiments that ignore the supply and demand fundamentals,” says Paul D. Gray, President and CEO of Zadar Ventures Ltd., a North American uranium and lithium explorer.

But the toxicity levels have dissipated, and nuclear energy is rebounding as a cleaner power source with next generation safeguards. The fundamentals are again ruling the day, and this will be the key year for uranium,” Gray told Oilprice.com.

Why Sentiment is Changing: Born in Chernobyl, Raised in Japan

The negative sentiment on uranium was largely made in Japan. The 2011 disaster at Fukushima created an irrational disconnect between sentiment and uranium fundamentals.

Now that enough time has passed since Fukushima, this negative sentiment is losing steam as it appears that Japan has succeeded in bringing some of its reactors back online – four of its reactors have already restarted operations. So the world is refocusing on what are arguably brilliant fundamentals, which actually have been there all along.

First and foremost, the world is building more nuclear reactors right now than ever before, despite Fukushima. A total of 65 new reactors are already going up, another 165 are planned and yet another 331 proposed.

Powering all of these developments will require an impressive amount of uranium. Right now, existing nuclear reactors use 174 million pounds of uranium every year. That will increase by a dramatic one-fifth with the new reactors under construction. But in the meantime, uranium producers have reduced output due to market prices and put caps on expansion. As a result, supplies are dwindling.

Currently, the world is increasingly recognizing nuclear energy as the cheaper, cleaner, and greener option—as indicated by the number of reactors being built.

As the specter of nuclear accidents wanes in the aftermath of Fukushima and climate change fears move to the top of the chain, uranium is set for a global sentiment transformation.

As Scientific American opines, “Nuclear energy’s clean bona fides may be its saving grace in a wobbling global energy market that is trying to balance climate change ambitions, skittish economies and low prices for oil and natural gas.”

According to Bloomberg, in Asia alone, approximately $800 billion in new reactors are being developed.

The market hasn’t quite caught on yet to what this massive nuclear development means for uranium because it’s still stuck in the Fukushima sentiment–but the cracks are showing and it’s about to break free.

At the same time, the uranium industry is not producing the uranium needed to feed the hundreds of new reactors slated to come online. Not even close. The uranium is not being produced because producers can’t turn a profit at today’s spot prices.

The minute the market catches on to the massive amount of reactors coming online combined with the pending uranium supply shortage, uranium will experience a price surge like no other commodity before it.

Up to 20 percent of the uranium supply needed to operate the world’s existing 437 nuclear reactors for the rest of this year and next is not covered, according to uranium market analyst David Talbot.

The market has recognized the pending lithium boom, for instance, as heralded by the electric vehicle (EV), battery storage and powerwall push. But the market is sleeping when it comes to uranium, which has even more obviously bullish fundamentals. That’s why when this sleeping giant awakens suddenly with the start-up of new reactors around the world, it will be with a roar that rewards those savvy enough to sneak around the irrational sentiment.

Determining when the break-out will come, exactly, is part and parcel of playing this rally with an eye to massive returns (for which you can thank the negative sentiment if you’re already onto uranium). But all bets are that this year we’ll see the first new reactors come online, and then it will snowball from there, transforming from a buyers’ market into a sellers’ market.

The Billionaires’ Sixth Sense

Billionaire investors are lining up behind uranium with major acquisitions, betting that they are on the edge of a price break-out.

Earlier in June, Hong Kong billionaire investor Li Kashing, though his CK Hutchinson Holdings and CEF holdings, said he would buy $60 million in convertible bonds from NexGen Energy targeting uranium projects in Canada’s Saskatchewan province.

“The current spot prices seem low, but the fundamentals indicate there’s going to be a very large demand and supply gap — that’s what you’re making a call on,” NexGen CEO Leigh Curyer said of the deal. NexGen is slated to start production in the 2020s.

Mr. Li’s $60-million bet on Saskatchewan uranium is near another uranium company, Zadar Ventures Ltd, which has four projects in Saskatchewan and one in Alberta, and stands to benefit from the high-dollar renewed focus on this resource.

The Athabasca Basin is elephant country in terms of uranium deposits. It represents the world’s highest-grade uranium deposits and is the home to all of the major uranium producers, developers and explorers.

If your going to look for the world’s next uranium mine, the Athabasca Basin is the place to do so.

Considering that nearly half of the U.S.’ 57 million pounds of uranium imports last year came from Canada and Kazakhstan, with Canada providing 17 million pounds—these producers are extremely well-positioned for what comes next.

Talbot predicts that the Uranium pound price could reach $65 within two years, and notes that some mines will be extremely profitable at this price—particularly those in the Athabasca Basin and in the western and southwestern U.S., while development of uranium deposits in Africa will require higher prices.

The Athabasca Basin is precisely where Zadar and NexGen operate, along with other promising contenders, including Cameco Corp. (TSX:CCO) and Denison Mines Corp. (DML:TSX).

Last month, billionaire D.E. Shaw let us all know that he’d acquired 1.4 million shares in Cameco, eyeing rising uranium prices, tightening supplies and growing demand—and joining the ranks alongside George Soros. And others have lined up, too, including well-known money managers Ken Griffin, Ray Dalio and Steve Cohen.

Then we have Bill Gates—who has jumped on the uranium bandwagon with great determination. Through his TerraPower company, Gates is developing a Fourth Generation nuclear reactor that would run on depleted uranium, rather than enriched uranium.

Increasingly, this is shaping up to be the the Year of Uranium, but while the market sleeps, big investors don’t: They’ll be all set when uranium experiences a violent upswing, and those operating around the Athabasca Basin are likely to be among the first to benefit from the upward price trend and shrinking supply.

http://oilprice.com/Energy/Energy-General/Uranium-Prices-Set-To-Double-By-2018.html

By. James Stafford of Oilprice.com

06/1/16
Saudi Oil

3 Years Of Painful Cuts Sets Markets Up For Serious Supply Crunch

Total global oil production could decline for the next several years in a row as scarce new sources of supply come online.

According to data from Rystad Energy, overall global oil output will fall this year as natural depletion overwhelms all new sources of supply. But the deficit will only widen in the years ahead due to the dramatic scaling back in spending on new exploration and development.

Statoil says that global capex is set to fall for two years in a row, and is on track to fall for a third year in 2017 as more spending cuts are likely. “For the first time in history, we’ve seen cutting of capex two years in a row and potentially we risk a third year as well for 2017,” Statoil’s Chief Financial Officer Hans Jakob Hegge told Bloomberg in a recent interview. “It might be that we see quite a dramatic reduction in replacing the capacity and of course that will have an impact, eventually, on price.”

Oil companies are making painful cuts to spending, which will translate into much lower production than expected in the years ahead.

Although markets have dealt with the supply overhang for the better part of two years, the surplus could flip to a deficit as early as this year, as declines exceed new sources of production by a few hundred thousand barrels per day. That widens to more than a million barrels per day in both 2017 and 2018. To be sure, there are extremely large volumes of oil sitting in storage, which will take a few years to work through. That will prevent any short-term price spike even if depletion surpasses new production. But Statoil’s CFO said the world could start to see supply problems by 2020.

According to a separate report from SAFE, a Washington-based think tank, the oil industry has cut somewhere around $225 billion in capex in 2015 and 2016, which will lead to global supplies 4 million barrels per day lower in 2018-2020, compared to what market analysts expected as of 2014.

Of course, these figures are not inevitable. A sharp rise in oil prices would spur new investment and new drilling. In other words, deficits create profit opportunities for drillers, ushering in new supplies. The price acts as a self-correcting mechanism.

The problem is that, unlike many other industries, resource extraction is extremely volatile, with supply responses very delayed. Many oil projects, after all, take years to develop. Supply overshot demand, crashed prices, and in response, supplies will undershoot demand in the next few years. The industry has always suffered from booms and busts, and there is little reason to think that it will change, at least in the short run.

But we tend to have a myopic view on what to expect. When oil prices go up, people buy fuel efficient cars. When they go down, SUVs are back in style. When the world is dealing with too much supply, market watchers predict oil prices will stay low for years to come. If spot oil prices suddenly rise, forecasts are revised sharply upwards.

Here’s another example: the WSJ reports that oil prices are entering a “sweet spot,” a range between $50 and $60 per barrel that could finally be good for the global economy – low enough to provide consumers with a bit of a stimulus, but high enough to keep the industry and capital spending afloat. Also, crude at $50, as opposed to $30, can provide a bit of inflation to the deflation-beset economies in Europe and Japan. “Crude between $50 and $60 would be the absolute sweet spot,” Mark Watkins, regional investment manager at U.S. Bank Wealth Management, told the WSJ. “Everybody wins there.”

That is all well and good, but who expects oil to trade between $50 and $60 for any lengthy period of time? If there is one thing that we have learned over the past two years, it is that nobody has a crystal ball on prices. And if the industry indeed cuts capex for three consecutive years, at a time when demand continues to rise, the one thing we can be sure of is more volatility.

Link to original article: http://oilprice.com/Energy/Crude-Oil/3-Years-Of-Painful-Cuts-Sets-Markets-Up-For-Serious-Supply-Crunch.html

By Nick Cunningham of Oilprice.com

05/5/16
Donald Trump

Our Watcher’s Council Nominations – Post-Constitutional Edition

The Watcher’s Council

Donald Trump

Welcome to the Watcher’s Council, a blogging group consisting of some of the most incisive blogs in the ‘sphere and the longest running group of its kind in existence. Every week, the members nominate two posts each, one written by themselves and one written by someone from outside the group for consideration by the whole Council. Then we vote on the best two posts, with the results appearing on Friday morning.

Council News:

This week we were sad indeed to say goodbye to long-time Council member Brent Parrish at The Right Planet.

Brent is taking a hiatus from blogging to concentrate on family and business concerns, and all of us wish him the best. And of course, as a plugged in member of the WoW community, we’ll look forward to hearing from him in the future in our Forum, our inter-Council threads and perhaps, even an article as a non-council submission if he gets the bug to write again, which we certainly hope he will.

This means we currently have a vacancy on the Watcher’s Council, the oldest and most established blogging group in the ‘sphere. Any talented, interested parties should contact me directly by leaving a comment on any story on JoshuaPundit, including your name, site name and e-mail info as well as anything else you wish to include. Needless to say, it won’t be published, but I will respond promptly to your inquiry and tell you what’s involved.

So, let’s see what we have for you this week…

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05/1/16
Washington2

The Council Has Spoken! Our Watcher’s Council Results – 05/01/16

The Watcher’s Council

Study

Crap

Washington

Washington1

Washington2

The Council has spoken, the votes have been cast and the results are in for this week’s Watcher’s Council match-up.

As an American liberal with impeccable credentials, I would like to say that political correctness is going to kill American liberalism if it is not fought to the death by people like me for the dangers it represents to free speech, to the exchange of ideas, to openheartedness, or to the spirit of art itself. – Best selling author Pat Conroy

Those who make conversations impossible, make escalation inevitable. – Stephen Molyneux

The idea that you have to be protected from any kind of uncomfortable emotion is what I absolutely do not subscribe to. – John Cleese

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04/28/16
Obama

Our Watcher’s Council Nominations: Secrets To Hide Edition

The Watcher’s Council

Obama

Welcome to the Watcher’s Council, a blogging group consisting of some of the most incisive blogs in the ‘sphere and the longest running group of its kind in existence. Every week, the members nominate two posts each, one written by themselves and one written by someone from outside the group for consideration by the whole Council. Then we vote on the best two posts, with the results appearing on Friday morning.

So, let’s see what we have for you this week…

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04/24/16
Tubman1

The Council Has Spoken!! Our Watcher’s Council Results – 04/24/16

The Watcher’s Council

Tubman1

Tubman1

Tubman2

Tubman3

Tubman4

The Council has spoken, the votes have been cast and the results are in for this week’s Watcher’s Council match-up.

Holly came from Miami F.L.A.
Hitch-hiked her way across the U.S.A.
Plucked her eyebrows on the way
Shaved her legs and then he was a she… – Lou Reed, Walk On The Wild Side

All men are liars, said Roberta Muldoon, who knew this was true because she had once been a man. – John Irving, The World According to Garp

Facts do not cease to exist because they are ignored. – Aldous Huxley

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04/24/16
Trading

Predictions of a Trading Apocalypse Are Grossly Exaggerated

By Chris Knowles

Apocalípico I by Mauricio Garcia Vega (artist) – Source/Photographer Mauricio Garcia Vega. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

Apocalípico I by Mauricio Garcia Vega (artist) – Source/Photographer Mauricio Garcia Vega. This file is licensed under the Creative CommonsAttribution-Share Alike 3.0 Unported license. Obtained from Commons.Wikimedia.

The Sky is Falling!

There are dire predictions of a trading apocalypse if Britain acts in its best interests and leaves the EU. That is if the hysterical campaign to remain in that undemocratic and economically fragile political grouping is to be believed.

The doom and gloom Remain crowd are now wheeling out globalist after globalist to scare Brits into submitting to EU rule. The people behind pointless wars, biblical scale migrations, financial disasters and undermining cherished freedoms are currently on the march again.The latest of these political ‘celebrities’ is Presidential wannabe Hillary Rodham Clinton.

It is obviously very clear that the globalists who seek to oppress us defiantly want the us Brits to remain as inmates in the open prison also referred to as the European Union – with no prospect of reprieve or parole.

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04/21/16
Clinton

Our Watcher’s Council Nominations – ‘Trust Me’ Edition

The Watcher’s Council

If President Barack Hussein Obama says something… need I finish that sentence?

Welcome to the Watcher’s Council, a blogging group consisting of some of the most incisive blogs in the ‘sphere and the longest running group of its kind in existence. Every week, the members nominate two posts each, one written by themselves and one written by someone from outside the group for consideration by the whole Council. Then we vote on the best two posts, with the results appearing on Friday morning.

So, let’s see what we have for you this week…

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04/18/16
Watcher2

The Council Has Spoken!! Our Watcher’s Council Results – 04/18/16

The Watcher’s Council

Watcher2

Watcher3

Watcher1

The Council has spoken, the votes have been cast and the results are in for this week’s Watcher’s Council match-up.

Intelligence plus character-that is the goal of true education. – Dr. Martin Luther King Jr.

To educate a person in the mind but not in morals is to educate a menace to society. – Theodore Roosevelt

In the first place God made idiots. This was for practice. Then he made school boards. – Mark Twain

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04/13/16
Obama

Our Watcher’s Council Nominations – Virtual Reality Edition

The Watcher’s Council

Michael Ramirez - Creators

Welcome to the Watcher’s Council, a blogging group consisting of some of the most incisive blogs in the ‘sphere and the longest running group of its kind in existence. Every week, the members nominate two posts each, one written by themselves and one written by someone from outside the group for consideration by the whole Council. Then we vote on the best two posts, with the results appearing on Friday morning.

So, let’s see what we have for you this week…

Continue reading