Actionable Intelligence Alert

New physical uranium fund with $100 million initial placement. Uranium prices look to have broken higher out of a wedge formation. Fred Hickey author of High Tech Strategist sees continued declines in Tech Sector stocks and the overall stockmarket. Why he is bullish on gold.

Billionaire hedge fund manager says the current asset bubble is more significant than any has seen and even bigger than anything he has ever studied. More positive nuclear energy news articles. The Iranians dumped 100 million barrels of oil on the market over the last three months. Has this contributed to the recent price weakness in oil?

The current financial system is built to work on low-interest rates and high liquidity. The exact opposite exists. Expect more banking system issues and further issues to manifest negatively as things break in the economy.

I review the Cameco first quarter 2023 earnings call. It was very positive and reaffirmed the continued upswing in the nuclear energy and uranium market.

I came upon a methodology conceived by analysts at Piper Standler to track the effect of interest rate increases on the economy. It will require additional research and refining of data sets but I think it will be helpful in the analysis of where we are in the economic cycle.

The China reopening might be struggling to gain momentum. Will this lead to less oil demand growth? India's oil demand continues to make new all-time highs.

I believe gold is in a new bull market. However, most people try and take advantage of it by buying junior gold mining stocks. This is a difficult way to make money and I explain why.

Several countries have applied for BRICs membership. International flights to and from China begin to resume. I still expect higher oil prices as we progress through 2023

Back in 2017, Janet Yellen said it was likely we would never have another banking crisis in our lifetime. The whole banking system is a confidence game and these people are just making it up as they go along. Believe them at your own risk.

Things are breaking due to rates being too high. In the past, every time we had a financial crisis the FED always went back to the playbook of papering over the problem. Are we closer to the end of the tightening cycle or the beginning? What asset classes benefit from a cycle of excess liquidity?

With the failure this week of Silicon Valley Bank I believe we are seeing the results of continuing liquidity tightening. If the FED continues raising rates and shrinking its balance sheet you will see more of this.

I had two tranches of coal producer Peabody Energy in the AIA portfolio.  I discuss why I bought the shares and why I recently sold both positions for 400-600% gains.

More data sets are lining up to indicate that the economy is weakening and yet the market has been rallying.  

My view is the lag effects of the rapid rise in the FED funds rate still have not fully shown themselves in the economy.

I give my base case for the economy and what I am looking at for the rest of the year. I caveat this by reiterating that I am not an economist. I am looking at data points that in the past have led to certain outcomes. Notably a recession.   

However, keep in my mind that as new information comes in I may change my forecast and that forces me to change course with various investments. Again this is not investment advice.

Cameco reported the largest fuel deal ever signed by the company. The deal is with the Ukraine State Energy Company.   

Other discussion points This Week  

-Japan reaffirms extensions to nuclear plants and commitment to nuclear energy. 

-Shell's board being sued by climate activists -Duke Energy takes big impairment on sale of renewable business 

-Jet fuel demand soaring as China leaves pandemic 

-Investigative article on US complicity in Nordstream 2 sabotage

In this week's video:  

-Yellowcake upsizes offering from $50 to $75 million 

-Sprott Junior Uranium ETF begins trading 

-How much spot uranium is really out there. One trader says if he tried to buy 1 million pounds it bump Uranium's price $5/lb 

-Uh oh. Cramer said to buy oil.

Lots of news this week: 

 -KazAtomProm production downgraded by 4-5 million pounds in 2023

 -Chile's copper production down for four years in a row. 

-Biden administration kills major copper mine in Minnesota 

-Chevron announces $75 billion stock buyback and increases dividend.

China set coal production records in 2022. The country will build 270 GW of New Coal Generation Capability by 2025.  Why? They say because of energy security.

One of the main ideas at AIA for 2023 is the return to normal of the Chinese economy and how this will affect oil and other commodity prices.   Traffic congestion and air travel are bouncing back quickly since the CCP lifted the lockdowns on Chinese citizens.   Forecasts are for up to 103 million barrels per day of oil demand by Q2 of 2023. The question is can the world produce this amount of oil?

Although the price of uranium mining stocks did not perform well in 2022 as many uranium investors might have liked, the fundamentals in my opinion have never been better.  I do not know if 2023 will be better, especially in the context of a general market bear market and tightening of liquidity. Nevertheless, I remain bullish and will add on dips.

As reported China is not wasting time and is re-opening its economy by ripping the band-aid off. There should be a lull as the virus sweeps through the population.   

However, experience in other countries tells us that when herd immunity is achieved we should see a rush of consumer spending as the population emerges from three years of lockdowns.   

This coincides with the PBOC now engaging in a new liquidity cycle which in the past has led to a rise in commodity prices.

This may or not be the last video for 2022.   

Merry Christmas!   

In this video, I talk about the stock of the year pick for 2023. The point of the SOY is blatant and unashamed clickbait for the channel and newsletter.   The premise is to select a highly speculative stock that has catalysts that could lead to a doubling in the stock price over the next year.   In the past, I did this and was successful for three or four years in a row.

The fundamentals in the oil market that were causing weakness in the oil market over the last six months now appear to be reversing and becoming tailwinds. 

 -Chinese economy opening up from three years of zero Covid policy. This could result in 2-3 million barrels of demand. 

-SPR releases ending. Biden administration now announcing refills of SPR. 1 million barrels per day of supply off the market. 

-Russian supply was juiced due to get ahead of sanctions earlier this month. 500-800k of supply off the market. 

-The continued reluctance of producers to spend money on new production and development due to negative policies including windfall profit taxes being imposed by governments. 

-Strong demand from emerging markets like India.  

The economy in the US and EU are now entering recessions. How much will this contribute to demand destruction?   If the world does not experience a GFC or Covid lockdown economic scenario, there is a good chance oil prices continue moving higher next year.

People want answers and in this video, I give an update about how I see things in the short, medium, and long term.

The US just hit a record for overall petroleum exports (both crude oil and refined products). Much of this has come from the SPR releases and exports to the EU due to sanctions on Europe's main energy supplier Russia.

Oil prices got clobbered over the last couple of weeks.   

However, long-term fundamentals have not changed in my view.   

In this week's video, I try and explain what is happening in the oil markets. China re-opening, recession in the US and EU, Emerging market demand growth, etc...

I am no expert on crypto and have dabbled in it in the past. However, I was always aware of the bubblicous conditions surrounding it facilitated mainly by years of low-interest rates along with investor's insatiable desire to get rich quick.  

Oil got nuked this week. Is this the beginning of deflation?

With tier-one assets developed along with constraints on the industry with respect to supplies and manpower are we at the end of continuous growth of shale oil and gas?  Follow me on Twitter: @JohnPolomny  

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When Joe Biden was running for President he told us he was going to "end fossil fuels". Now that high oil prices and in particular gasoline and diesel prices are contributing to record inflation he is mad at them for doing what he told them to do.   

The lack of a coherent energy policy across not only the US but the entire west is opening up a host of opportunities for investors and speculators like us.

The world's largest chemical company, Germany-based BASF, is announcing permanent plant closures and restructuring of its facilities in Germany.  

I forecasted this would happen and it will continue all over the EU until the Europeans figure out how to replace cheap and plentiful Russian gas.

Bloomberg Green article says the transition to 100% zero carbon will cost $114 trillion dollars. That is 5-6 times the size of the US single-year GDP. I don't think that will happen.   

Nevertheless, the political class will move this agenda forward. Heads we win, tails we win more.

Interesting comments out of JP Morgan CEO this week regarding our energy policies in the US.   

In addition, it looks like the zeitgeist is moving away from ESG, at least by the bankers.

As most of you know the OPEC members decided on a 2 million barrel per day reduction to their production quota. This is not necessarily a cut in production because the organization members were already underproducing their quotas by 3.5 million barrels.  

Nevertheless, this is a big boost for oil prices because it represents a sentiment shift in oil markets. Of course, oil markets responded by rallying. I discuss the second-order effects in this video.

With the Nordstream 1 and 2 pipeline destruction last week, the EU energy situation is now critical.   However, the various industries will try and adapt as best they can. One way to adapt will be to replace gas consumption with oil consumption. This could be close to a million barrels per day.

As Stan Druckenmiller has said," “Earnings don’t move the overall market; it’s the Federal Reserve Board… focus on the central banks, and focus on the movement of liquidity… most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets...”~ Stan Druckenmiller

This is what we are seeing and it will continue until central banks pause and go back into a new liquidity cycle.

Due to sanctions placed on Russia by the EU, oil and refined products now need to be sourced from places more distant from the EU than before. This is causing more ton-miles for the existing tanker fleet.  This is also causing rates to skyrocket as there are not enough tankers to move all this product further distances. It appears, that for as long as sanctions are in place, we are looking at a time of elevated rates for tankers.

The energy minister was interviewed on CNBC. He was asked why is India still buying oil from Russia. The interviewer tried to make the purchase of oil from Russia a moral issue.   

The minister wasn't going to have it. He is responsible to India not the EU, the US, or Ukraine.

It was announced yesterday that the Nordstream 1 pipeline will be down indefinitely.  The only Russian gas coming into the EU is coming in through the pipelines from Ukraine. That will not be enough. We are now seeing story after story of businesses shutting down and jobs lost.

For several years billionaire resource investor Rick Rule maintained the view that a real move higher in uranium prices would be incumbent on the restoration of nuclear energy in Japan.  It seems he was proved correct as Japan recommitted to nuclear energy in the past week which caused a blastoff in uranium stock prices.

Recent comments by the Sadi Aramco CEO and the CEO of OPEC back up what we have been saying for a while now. Although the west is moving rapidly to transition away from oil, the rest of the world, and the majority, will be using oil for decades.

Lots of energy news this week. Power prices in Europe are soaring to record highs.   

How long can this continue until there is a political backlash?  

Japan vows to turn on more nuclear reactors for energy security.

Oil prices have been dropping over the past couple of months. I explore why this is and where oil prices might be going.  

Although oil prices are dropping natural gas and coal prices are at historical highs. Why it might be a while before they drop.

Exxon and Chevron reported record quarterly results this week as record refining margins along with high oil prices resulted in excellent results.

European oil majors also reported excellent results with several companies announcing additional returns of capital to shareholders via share buybacks.

Schlumberger, the world's largest oilfield service provider, just reported a tremendous quarter, guiding their business substantially higher for the next few quarters.  

This report along with Halliburton's bullish report earlier this week indicates that we finally have an upswing in the oilfield services sector. A boom that I believe will outshine previous booms.

CPI came in at a decades high of 9.1%. If calculated the way it was in 1980 it is actually 17%!  I also discuss how far oil could fall in the current recession.

In the past, Buffett has said he does not like cyclical or commodity-type businesses.   

Yet he has been buying Oxy and Chevron stock. What gives. I discuss in this week's video.

The bond market seems to be shifting from concern over inflation to economic weakness.  

The bond market forecasts a rate cut in the first half of 2023.  

The energy crisis continues as the "leadership" in the EU and the US just can't stop digging their hole deeper.

Rates are being raised by the FED. However, the market has raised rates well in advance of FED. Consequently, the FED is way behind the curve.  

How far can rates go up before an over-indebted economy full of malinvestment begins to break?  How will this affect energy prices? Will liquidity and sentiment overwhelm the positive long-term energy fundamentals in the short term?

Consumer confidence is at an all-time low.  Credit card debt is at an all-time high.  Energy costs continue to strangle the US consumer and economy.  I give a free stock pick that could soar during a recession.

The energy crisis continues. At some point, the energy price will rise to a sufficient price to choke off demand.  

The question is what is that price? $150, $200, or even $300 per barrel. 

In the meantime, many of the stocks in the Actionable Intelligence Alert Newsletter are printing tons of money.