What happened
Shares of uranium miners Denison Mines (DNN 4.74%), Uranium Energy (UEC 4.83%), and Energy Fuels (UUUU 5.85%) surged Tuesday, rising 5.6%, 5.8%, and 10.6%, respectively, by the time markets closed for the day.
Image source: Getty Images.
So what
As OilPrice.com reported today, a committee of the OPEC+ group of nations (OPEC, plus a few other oil-producing nations such as Russia that also have an interest in oil prices), decided today to continue with a planned increase of 840,000 barrels per day (bpd) in July production quotas.
Oil demand is expected to grow by 6 million bpd, or 6.6%, to 96.5 million bpd on average this year, OilPrice.com said, as economies open back up and demand for energy surges. By the fourth quarter this year, OPEC+ predicts global demand will surpass 99 million bpd, great news for oil stocks.
Now what
By the end of Tuesday trading, WTI crude prices had climbed 2.4% and Brent crude prices were up 1.6%. This has two big implications for energy investors. First and foremost, although you'd expect the announcement of a big increase in oil production to result in oil prices falling, that didn't happen -- suggesting there's a lot of demand for oil. And because oil prices went up, not down, that gives alternative energy sources, such as nuclear, room to charge more for their energy output as well.
Second, the increase in oil production naturally implies an increase in consumption -- and more greenhouse gases. That can be expected to increase interest in alternative energy sources, which suggests an even more direct benefit to nuclear power producers, and miners of nuclear fuel like Denison, Uranium Energy, and Energy Fuels, thus the increase in their share prices today.
