Glowing Times Ahead for Uranium

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Jamie Strauss, at BMO Capital Markets, who called both the upturn and the subsequent shake-out, now believes the fall is over.

...Miners at a series of meetings hosted by broker BMO Capital Markets expressed optimism that the price slide was over. It followed an astonishing two-year price surge from $22 per pound in the 'spot' price (for immediate delivery) to $138 in June.

It was hardly surprising that speculators took profits. More selling came when the US decided to unload some of its strategic reserve.

Some investors will wish to steer clear of nuclear power. Others who followed our uranium tips on the way up - and subsequent advice to take some profits - have done well. Jamie Strauss, at BMO, who called both the upturn and the subsequent shake-out, now believes the fall is over.

The industry believes demand for primary (newly mined) uranium will treble by 2030. That could push the spot price from $80 to $100 a pound over the winter, although the long-term price (now $95) is more relevant to the industry.

Like it or not - and many do not - nuclear power is hard to ignore as the world runs short of oil and gas, and the crude oil price rises above $90 a barrel. This week Germany's Energy Watch Group argued that global oil production has already peaked, and will halve by 2030.

That is more pessimistic than other forecasts, but if correct, oil could pass $100 and head for $200. EWG points out that the average size of a new oil find has plummeted from 527m barrels in the 1980s to 20m recently.

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