Uranium stocks trend today as commodity prices continue to rise and nuclear power is reported to become increasingly important. Experts predict this change as the United States and the European Union reduce their dependence on Russian energy.
Uranium Miners Stocks Uranium energy (NYSEMKT:CUE), Denison Mines (NYSEMKT:DNN) and Cameco (NYSE:CCJ), among others, are in fashion today. It comes as nations around the world look for ways to reduce their dependence on Russian oil, natural gas and coal.
UEC, DNN and CCJ shares have each risen more than 15% since the start of the year, as the Russian invasion of Ukraine pushed up energy prices and spotlighted uranium as a main driver of nuclear power plants. The price of uranium has risen 86% over the past year to $56.70, including a nearly 25% gain so far in 2022.
What happened with the uranium stocks
In a new round of sanctions, the European Union has announced that it will completely ban imports of Russian coal from August. The coal ban is the latest attempt by European countries to economically punish Russia for its invasion of Ukraine. However, hitting Russian energy supplies is not easy for the EU.
Almost 20% of EU coal imports come from Russia, according to official EU statistics. At the same time, 37% of European oil imports and 41% of its natural gas imports come from Russia, underlining the difficulty of sanctioning the regime of Russian President Vladimir Putin. To reduce its dependence on Russian energy products, the EU is looking to nuclear power plants as a viable alternative.
why is it important
That nuclear energy is back on the political priority lists of governments around the world is good news for uranium producers. This helps explain the rise in uranium stock prices in recent months. However, there is no guarantee that nations in Europe and elsewhere will go ahead with plans to build nuclear power plants, which are still considered by many to be risky and dangerous.
Additionally, nuclear power plants can take years to develop and come online safely.
The European Union’s plan to halt Russian coal imports is seen as the start of a shift to nuclear power and a vote of confidence in the energy source. And uranium stocks benefit from it. However, any development of nuclear power plants in Europe or elsewhere will take years, if not decades, to materialize. As such, it will still be some time before nuclear power functions as a viable substitute for Russian oil and natural gas.
As of the date of publication, Joel Baglole had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.