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December 10th, 2018

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The Saudi Dilemma: To Cut Or Not To Cut
OilPrice  Dec 05  

VanAurum uses Artificial Intelligence to Deliver Superior Trading Opportunities
Bob Moriarty  Dec 04  

The Rodney Dangerfield of the Junior Oil & Gas Sector
Kevin Dougan  Nov 07  

U.S. Shale Has A Glaring Problem
OilPrice  Oct 24  

Oil Price Rally Boosts Electric Car Sales
OilPrice  Oct 10  

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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,

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,


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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 12/10/18

Outside Forces

OPEC resisted outside forces and pressure from President Donald Trump to not cut production only to have oil falter from outside market forces. Originally oil soared almost 4.5% on the OPEC production cut news. Fears that Russia would not join cuts and that Iran was a sticking point went away, as they agreed to cut production by 1.3 million barrels. Reuters is reporting that Saudi Arabia's crude oil exports are expected to drop next month by some 1 million barrels per day (bpd) from November levels. Now add in the fact that Alberta Premier Rachel Notley has announced a temporary 8.7 per cent oil production cut, or decrease of 325,000 barrels a day, puts the total reduction to 1.6 million barrel per day.

Yet, it's all starting to unravel on outside pressure from a weakening stock market and outside macroeconomic fear forecasts. The sell-off came shortly after a speech by St. Louis Federal Reserve bank president James Bullard who suggested that the Fed should take a pass on raising rates in December. That sent a signal to the market that if the Fed paused, then maybe things in the economy are already worse than they seem to be. Up until then, oil traded to ignore China trade war fears. Yet over the weekend those fears are heating up, adding to falling oil demand expectations.

The arrest of Huawei Technologies Co. Chief Financial Officer Meng Wanzhou still is rattling markets. Over the weekend China recalled the U.S. Ambassador to China, Terry Branstad, in a protest over the arrest and said it will take “further action” if needed. That raised fears that the progress in the trade war would be lost and have us set in for a cold winters nap.

Yet from the supply side oil cuts will matter especially if the slowdown fear is being overstated. We saw U.S. oil rigs fell by 10 rigs, the biggest weekly drop since May of 2016. U.S. oil inventories plunged last week and should fall again.

Gas prices continue to fall. Trilby Lundberg of the Lundberg survey reports that the retail pump price dropped 22 cents in the past three weeks to $2.51, and it's down a whopping 40 cents over three months. The pain from low oil prices, felt by producers over the past few months, is certainly shared by U.S. refiners because they lost gasoline margin yet again - and by retailers too, who have now given up more than 8 cents of their gasoline margin but are still in the pink.

Now that the production cutback agreement among OPEC and several non-OPEC members to remove 1.22-mmb/d from world supply for January 2019 has been struck, bringing a modest bump in oil prices, refiners are on edge. They have long resisted hiking wholesale gasoline prices to stop the margin bleeding that even comparatively stronger diesel fuel prices can't make up for. As for retailers, they may well have to give up another chunk of gasoline margin to chase sales whether crude oil prices hold or not and whether refiners raise wholesale gasoline prices or not.

Trilby says that If motorists keep winning, by getting some further pump price cuts, there's a silver lining for refiners and producers embedded: price-happy motorists may well usher in some genuine gasoline demand growth, indirectly feeding everyone upstream. The current retail price is, for a change, below its year-ago point: It's a four-cent discount, another tidbit in favor of gasoline demand.

Get the power to prosper! Stay tuned to the Fox Business Network! Call to get my wildly popular daily trade levels at 888-264-5665 or email me at pflynn@pricegroup.com

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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.

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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.

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December 10th, 2018

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