FRIDAY EDITION

February 12th, 2016

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editorials

 
A Titan Opportunity in Oil
Bob Moriarty  Feb 05  

Climate Change: A Short Note
Ferdinand E. Banks  Dec 01  

Natural Gas Economics: An Update
Ferdinand E. Banks  Nov 20  

Oil Market Update
Clive Maund  Nov 17  

Sweden Prepares for War
Ferdinand E. Banks  Sep 29  

»» more editorials in the archives

market data


Ux U3O8 Price (Uranium)Feb 1st, 2016
$34.65 -$0.10 www.uxc.com



»View Commitment of Traders.

expert analysis & newsletter briefs

NexGen Energy Ltd.

"My top pick for 2016 is NexGen Energy Ltd. . . Arrow is an emerging world-class deposit that is still in the early stages of discovery. The state—it being so early in the delineation and development process—means a lot of upside still remains. . .the company just closed a $21M financing, which means the company has enough cash to carry through 2016 and beyond." (12/23/15) - Gwen Preston, Resource Maven

NexGen Energy Ltd.

"My top pick for 2016 is NexGen Energy Ltd. . . Arrow is an emerging world-class deposit that is still in the early stages of discovery. The state—it being so early in the delineation and development process—means a lot of upside still remains. . .the company just closed a $21M financing, which means the company has enough cash to carry through 2016 and beyond." (12/23/15) - Gwen Preston, Resource Maven

Fission Uranium Corp.

"Fission Uranium Corp. announced it entered into a binding letter of intent with China's CGN Mining, a subsidiary of nuclear giant China General Nuclear Power Group, to acquire 19.99% of Fission as part of an CA$82M strategic investment, along with a potential future offtake agreement on production from Patterson Lake South (PLS). . .we urge investors to bolster positions in Fission as the deal derisks development financing, and in the interim, should fund PLS through full feasibility and permitting." (12/22/15) - David Sadowski, Raymond James

Energy Fuels Inc.

"Energy Fuels Inc. is the only conventional uranium producer in the U.S. and the second-largest producer overall. It has the potential become #1, given the projects and mines it has on standby or that are close to being in development. At full ramp-up we expect the company to be able to produce 5–7 Mlb/year, in a country currently producing 4–5 Mlb/year. The U.S. consumes 55 Mlb/year, but only about 10% is supplied domestically. U.S. utilities seeking security of supply will greatly prefer U.S. producers over those from Kazakhstan, Russia or Africa. This company is well positioned to benefit from higher uranium prices. We have a Buy rating with a target price of $11.85/share." (12/22/15) - The Energy Report Interview with Rob Chang

Fission Uranium Corp.

"Fission Uranium Corp. announced it entered into a binding letter of intent with China's CGN Mining, a subsidiary of nuclear giant China General Nuclear Power Group, to acquire 19.99% of Fission as part of an CA$82M strategic investment, along with a potential future offtake agreement on production from Patterson Lake South (PLS). . .we urge investors to bolster positions in Fission as the deal derisks development financing, and in the interim, should fund PLS through full feasibility and permitting." (12/22/15) - David Sadowski, Raymond James


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from the publisher
  Robert J. Moriarty

Welcome to 321energy.



The Energy Report

Phil Flynn
http://www.pricegroup.com/
pflynn&pricegroup.com


The Energy Report 02/12/16

We Won't Back Down

No matter what, we won't back down. Well on second thought, maybe we will back down. It's not what is being proposed but it is who is doing the proposing. After a late break in oil that drove it to the lowest level since 2003, we rebounded on an OPEC production cut story.

Dow Jones reported that UAE Energy Minister Suhail bin Mohammed al-Mazrouei said that OPEC may be open to cutting production. This is the same OPEC oil minister that just a month ago said that OPEC wound not back down and would not cut production. Mr. Al-Mazrouei said it was the job of other high cost oil producers because it was their production that was creating the glut. Now it seems he has had a change of heart.

There was also talk of a production freeze. In other words, perhaps OPEC will put in a new production quota that would justify current production. If you remember, the OPEC production quota went out the window at the last OPEC meeting which raised concerns that every OPEC country would produce as much oil as they can. Now with prices falling as hard as they have, it is possible that with no money, most OPEC countries are already producing as much oil as they already can. So in other words, OPEC output is near a peak.

We know U.S. oil output was at a peak. The Wall Street Journal reports that more cuts in the North American energy sector loom as oil nears $25.00. U.S. and Canadian producers are losing at least $350 million a day at current prices. The plan to pump more oil, lose money on every barrel and try to make it up in volume is not working. This is unsustainable and it will mean more output cuts.

The Journal also reported that globally, nearly $1.5 trillion worth of oil spending will be canceled between 2015 and 2019, according to IHS estimates, which should eventually mean global oil output will fall.

Yet we still have to get through the glut that as the Journal points out, in the U.S. more than 500 million barrels of oil are in storage now, near levels not seen at this time of year since the Great Depression, according to the latest federal data.

OPEC may also be realizing that this oil drop may be actually hurting the demand for their oil. What good is maintain your market share if that share quits buying oil. The situation with the sell-off in bank stocks and the spike in gold may have been the sign to OPEC that it was time to stop the oil price drop before it stopped the global economy.

Interesting story in the Journal. They say that the gold price is already at its most expensive since the Victorian age - against oil. An ounce of gold will now set you back more than 40 barrels of oil. The cost of gold relative to oil prices is one metric and used by some investors as a signal of financial jitters. The current divergence of these two high profile commodities says a lot about investor's current appetite for risk amid a widespread market swoon. Concerns about global growth typically drive oil prices lower and the gold price higher, causing the ratio to spike. The precious metal is now four times as expensive relative to oil as it was in 1968, when Factiva's data series begins.

Since that year the crude oil/gold relationship has never been so stretched. Yet that period includes some serious periods of market stress, from the oil price collapse of the late 1980s to 2008's financial crisis.

There is a substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Phil is one of the world's leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets. Phil's market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide.

PLACING CONTINGENT ORDERS SUCH AS "STOP LOSS" OR "STOP LIMIT" ORDERS WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS. SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Contact Phil at 800-935-6487 or pflynn&pricegroup.com.



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February 12th, 2016

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