VIDEO - Energy Update July 2019

Despite a summer lull in the resource space, July brought major news in the uranium sector.  

Most notably, US President Donald Trump passed down his decision on the Section 232 investigation into foreign uranium supplies.

Much to the surprise of sector watchers, the US leader did not implement a domestic production quota. There was widespread speculation during the almost year-long investigation that the president might establish a domestic mining quota of anywhere between 5 and 25 percent.

“At this time, I do not concur with the Secretary’s finding that uranium imports threaten to impair the national security of the United States as defined under section 232 of the Act,” reads his statement.

“Although I agree that the Secretary’s findings raise significant concerns regarding the impact of uranium imports on the national security with respect to domestic mining, I find that a fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain is necessary at this time.”

Instead, Trump has opted to establish the US Nuclear Fuel Working Group to further investigate the impact of foreign uranium on the country’s national security.

Foreign uranium also took center stage early in the month when Iran confirmed it has stockpiled more than 300 kilograms of enriched uranium.

The nation, which has been locked in a trade war with the US, had threatened it would up its uranium enrichment efforts last year after Trump pulled out of the 2015 Joint Comprehensive Plan of Action.

The Obama-era deal saw member nations oversee Iranian enrichment, while Iran was able to have international sanctions lifted and eased, allowing it to participate in the global economy.

Over in the oil and gas space, a report from the Fraser Institute paints a bleak picture for investment in the sector in Canada. According to the think tank, investment fell 44 percent between 2014 and 2017.

“Policymakers routinely underestimate how unattractive Canada has become to investors and businesses,” Steven Globerman, Fraser Institute senior fellow, said in a press release.

The oil and gas sector has been plagued with transportation and production issues over the last few years, which is weighing on investment sentiment.

Following the release of the report, later in the month, nine of Alberta’s natural gas producers penned an open letter to Premier Jason Kenny calling for bold leadership.

“It is imperative that the Government of Alberta intercedes as the viability of the Alberta natural gas sector is in jeopardy and on our current trajectory the consequences will be dire for the many Albertans that rely upon the natural gas sector directly and indirectly to support their communities,” it reads.

The gas producers are calling for self-imposed production caps, as well as a reprieve from royalty payments.

The value of Alberta natural gas has steadily trended lower all year, and the gas producers are calling for these measures in an attempt to bolster prices.

For more on uranium, read our Q2 sector update; H1 overviews of the oil market and gas space are also available.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.