• 5 hours Permian Still Holds 60-70 Billion Barrels Of Recoverable Oil
  • 10 hours Petrobras Creditors Agree To $6.22 Billion Debt Swap
  • 14 hours Cracks Emerge In OPEC-Russia Oil Output Cut Pact
  • 18 hours Iran Calls On OPEC To Sway Libya, Nigeria To Join Cut
  • 20 hours Chevron To Invest $4B In Permian Production
  • 21 hours U.S.-Backed Forces Retake Syrian Conoco Gas Plant From ISIS
  • 23 hours Iraq Says Shell May Not Quit Majnoon Oilfield
  • 3 days Nigerian Oil Output Below 1.8 Million BPD Quota
  • 4 days Colorado Landfills Contain Radioactive Substances From Oil Sector
  • 4 days Phillips 66 Partners To Buy Phillips 66 Assets In $2.4B Deal
  • 4 days Japan Court Slams Tepco With Fukushima Damages Bill
  • 4 days Oil Spills From Pipeline After Syria Army Retakes Oil Field From ISIS
  • 4 days Total Joins Chevron In Gulf Of Mexico Development
  • 4 days Goldman Chief Urges Riyadh To Get Vision 2030 Going
  • 4 days OPEC Talks End Without Recommendation On Output Cut Extension
  • 4 days Jamaican Refinery Expansion Stalls Due To Venezuela’s Financial Woes
  • 4 days India In Talks to Acquire 20 Percent Of UAE Oilfield
  • 5 days The Real Cause Of Peak Gasoline Demand
  • 5 days Hundreds Of Vertical Oil Wells Damaged By Horizontal Fracking
  • 5 days Oil Exempt In Fresh Sanctions On North Korea
  • 5 days Sudan, South Sudan Sign Deal To Boost Oil Output
  • 5 days Peruvian Villagers Shut Down 50 Oil Wells In Protest
  • 5 days Bay Area Sues Big Oil For Billions
  • 5 days Lukoil Looks To Sell Italian Refinery As Crimea Sanctions Intensify
  • 5 days Kurdistan’s Biggest Source Of Oil Funds
  • 6 days Oil Prices On Track For Largest Q3 Gain Since 2004
  • 6 days Reliance Plans To Boost Capacity Of World’s Biggest Oil Refinery
  • 6 days Saudi Aramco May Unveil Financials In Early 2018
  • 6 days Has The EIA Been Overestimating Oil Production?
  • 6 days Taiwan Cuts Off Fossil Fuels To North Korea
  • 6 days Clash In Oil-Rich South Sudan Region Kills At Least 25
  • 6 days Lebanon Passes Oil Taxation Law Ahead Of First Licensing Auction
  • 7 days India’s Oil Majors To Lift Borrowing To Cover Dividends, Capex
  • 7 days Gulf Keystone Plans Further Oil Output Increase In Kurdistan
  • 7 days Venezuela’s Crisis Deepens As Hurricane Approaches
  • 7 days Tension Rises In Oil-Rich Kurdistan
  • 7 days Petrobras To Issue $2B New Bonds, Exchange Shorter-Term Debt
  • 7 days Kuwait Faces New Oil Leak Near Ras al-Zour
  • 8 days Sonatrach Aims To Reform Algiers Energy Laws
  • 8 days Vitol Ups Cash-for-Oil Deals With Kazakhstan To $5B
Alt Text

Two Nuclear Plants Are In The Path Of Hurricane Irma

Hurricane Irma has already devastated…

Alt Text

Is This The Newest Nuclear Player In The Middle East?

Oman’s sovereign wealth fund just…

Alt Text

The Slow Death Of Nuclear Power In Europe

Abandoning nuclear power as a…

Uranium Prices Set To Rise In 2017

Kazakh uranium

Uranium prices have rebounded a little in recent months. With spot rates rising to a current $22.75/lb — after falling as low as $18 in late 2016.

But a new plan from the world’s top producer could help get prices moving upward again. As this major plans to increase its presence in buying and selling uranium around the world.

The firm is Kazakhstan state miner KazAtomProm. Which said this past week that it is setting up its first-ever trading subsidiary, to become more active in setting uranium prices.

KazAtomProm’s commercial director Riaz Rizvi told an industry conference late last week that a trading arm based in Switzerland has now been established. With full staffing for the office expected to be completed by the third quarter of this year.

Director Rizvi noted that after that point, KazAtomProm’s uranium traders will become active in the spot market. A fact that could be very significant for uranium prices.

Here’s why: uranium spot prices generally fall well below long-term prices. As the chart below shows, there’s been an approximately $10 to $20 gap between the two marker prices over the past decade.

 

(Click to enlarge)

Spot uranium prices tend to lag long-term prices by $10 to $20 (source: Cameco)

KazAtomProm sees a big reason for that spread: a lack of trading in the spot market. As Rizvi put it, “The problem is the fact that we are not buying and selling material.” Related: ‘’OPEC Has Failed’’

Rizvi pointed out that in other commodities, long-term prices generally don’t rise much above the cost of storage. If that happens, traders and other market participants simply buy up spot product and keep it, to sell in the future.

KazAtomProm may now be planning to bring such a strategy to uranium. Which could help to narrow the gap between spot and long-term prices — especially given the financial power this big firm has behind it.

That in turn could lead to a significant rise in spot prices. Storage fees for some industry groups runs as little as $0.22/lb yearly — meaning spot rates could rise a lot from the current $10 to $20 discount to long-term, and still offer a profitable arbitrage. Watch for potential changes coming in uranium trade and pricing starting in Q3.

Here’s to stepping into the market.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News