What happened

It's another crazy day on the energy markets Thursday, but for a change, this time the story doesn't appear to have much to do with the even crazier swings in oil prices that we've seen these past few days.

Shares of hydrogen fuel cell pioneer FuelCell Energy (NASDAQ:FCEL) were up 9.2% in noonday trading, after topping 10% earlier in the morning (although they cooled to a 4% gain by 3:35 p.m.). And that probably did have something to do with the rise in oil prices making alternative fuels more economically competitive. At the same time, shares of Energy Fuels (NYSEMKT:UUUU) and Uranium Energy (NYSEMKT:UEC) were reading 0.8% and 7.4% higher, respectively, late in the trading day after both had jumped more than 20% earlier.

While those two early gains for Energy Fuels and Uranium Energy probably have something to do with rising oil prices (nuclear is, after all, an alternative to oil, and WTI crude oil futures are up nearly 29% today), they probably have a lot more to do with a supply bottleneck in uranium.  

So what

One month ago, uranium miner Cameco (NYSE:CCJ) announced it would suspend production at its Cigar Lake uranium mine in northern Saskatchewan, Canada, in order to prevent exposure of its miners to COVID-19. But 10 days ago, Cameco said that it will be extending the closure "for a longer duration" in response to "precautions and restrictions put in place by the federal and provincial governments."  

The length of the closure remains "indeterminate," but as financial news site FNArena reported today, Cameco's reduction in production is requiring the company to buy uranium from other producers, like Energy Fuels and Uranium Energy, in order to meet its contractual obligations to supply nuclear fuel to its own customers.

Cartoon picture of two nuclear reactors generating steam

Image source: Getty Images.

Now what

Cameco's forced buying of uranium, FNArena says, "is not lost on sellers of uranium, which currently are mostly traders." It's the No. 1 most-likely reason we're seeing a spike in trading in Energy Fuels and Uranium Energy stock today, as investors bet these companies' sales, profits, and stock prices will improve as the companies take advantage of Cameco's closure.

Now, this may be a logical reaction by traders. But I'd caution investors to be aware that neither Energy Fuels nor Uranium Energy looks particularly attractive as a long-term business investment. Energy Fuels, for example, hasn't earned a profit at any time in the past five years -- nor generated positive free cash flow in the past 10 years. Uranium Energy has remained unprofitable and free-cash-flow negative for more than a decade.

If you're looking for a quick trade and a quick buck, these stocks may work out for you in the short term. If you're looking for a great long-term investment, however, I'd suggest you look elsewhere.