Uranium Prices Rising - Likely to Stay High

The world's energy markets have been fixated on the prices of oil and natural gas as geopolitical instability and production difficulties have driven the prices of these critical resources sky high. Yet a growing awareness of global warming and the effects of carbon emissions from fossil fuels has caused people to look for cleaner alternatives.

While nobody even ten years ago would have described nuclear energy as a clean energy alternative, today the proven technology's lack of carbon dioxide emissions makes nuclear power worthy of more than a second look.

Yet uranium prices have been on a tear, rising from only $7 per pound to $113 per pound.

The tremendous increase in price has been driven by a precipitous drop in inventories rather than an increase in demand - which has been been flat for the last five years. Cameco Corp. Inc, the producer of 28% of the world's uranium saw production at its largest mine delayed by two years due to flooding. Energy Resources, producer of 23% of the world's uranium, has also seen production delays in Australia.

Nuclear energy is going to see tremendous increases in investment in the coming years and uranium prices aren't going to drop. Of course, the actual price of uranium is a small cost compared to the other expenses associated with building and running a nuclear power plant, so most power plants aren't very sensitive to the price of their fuel.