"Traders are enthralled by the rising uranium price and by the story, but this is a Sprott-controlled market and they have been hyping it and will continue to hype it as long as Crude Oil prices are headed north. I’m here to tell you that if Crude Oil prices were to collapse – not that I think they will (as you know) – then there would be no fundamental reason to bid up the uranium producers – or for Sprott to ratchet prices of U3O8 higher.
This so-called uranium market and surrounding story is all a scheme, so be careful. There is, of course, a basic rationale for it, but the essence of every stock promotion is that there are less “facts” and more “storylines” to it than the public generally understands."
I'm not sure I buy all of that. There is very little crude oil used in electricity generation. So, if the crude price falls, then it doesn't do anything to increase the supply of uranium.
Also, Cara doesn't reference why he is getting all of these requests, namely, the accident at Cigar Lake but maybe he has already addressed that. I think he raises an important point though. This is a very tiny sector that has one player who has established a dominant position. Whether they can truly control the uranium price remains to be seen. It seems likely that the uranium price is headed substantially higher in any event. However, Cara's points do serve to remind that it is no sin to bank profits along the way. |
