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Three Glowing Uranium Stocks

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In the face of fluctuating energy prices and changing regulation, going nuclear may be a good strategy.

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Kate Stalter: Today, I am speaking with John Manfreda of Wall Street for Main Street. John, you have done extensive research and analysis into the energy sector, so I wanted to talk with you about that today.

Maybe we could start with oil. There's not a whole lot of hoopla from Congress when oil prices go down. But when they go up, there tend to be cries for investigations about speculators, and then it dies down when the prices go down again. Talk a little bit about what you're seeing there, and maybe even how political motivations play into whether attention goes to that sector or not. Give us your outlook right now.

John Manfreda: Right now, I would say it's coming right up from its short-term lows of $80 per barrel. There's always hoopla because the voters don't like paying for more at the pump, and so politicians always try to capitalize on whatever political goal it has, regulating the Mercantile or Chicago Exchange, or taking over businesses or whatever.

Right now, what I see is oil will be up slowly but surely. Right now, it's hard to determine where it's going to go in the short-term, because the market is pricing in the depression in Europe, they're pricing in a faltering economy in the US. If you look at the oil stocks, compared to the oil price, they're lower by three standard deviations.

If the current price right now is looked at as the new normal, which I think it is for numerous reasons, then the oil stocks-despite oil prices going flat-the oil stocks, I think, will go straight up soon. It will return to the normal prices. That's what I see right now.

When it was at $80 recently, I would say in the beginning of June...if it goes into the low $70s, 20% of the world's reserves are now deep water, and those come right off the market. So $80 is, I would say, the new era of cheap oil. If it went even to the $60s or $70s, a lot of shale would come off and enhance the oil reserves.

Extraction costs over the past, I'll say ten years, have gone up drastically. That's what I'm seeing. This is a new normal, $80 into $90 a barrel being cheap oil.

Kate Stalter: Let's talk a little bit about natural gas. The media attention on this market kind of tends to ebb and flow, but there is overall some growing optimism about the potential for more usage here. What is your research showing?

John Manfreda: I would say, yeah, definitely. A lot of coal plants are switching over to natural gas with its cleaner burning fuel. Coal has a lot more regulations than natural gas, so that's another reason it's reducing regulatory burdens.

There's a lot of money to be made in natural gas, if you ask me, because of this shale revolution and stuff like Marcellus Shale, the Bakken, Eagle Ford. The US is now, I would say, when it comes to natural gas, is energy independent. It has enough, not only for different types of usage, but it also has enough to export.

Not only that, 90% of our uranium is imported, believe it or not. We import 70% of our oil. I would say natural gas is the one thing that could really help rebuild the US infrastructure.
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No positions in stocks mentioned.
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