Basic Materials

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Gevo Inc GEVO Stock News

Gevo, Inc. (NASDAQ: GEVO)

Gevo has been an incredibly interesting stock to watch as of late. If you’ve followed my work, you know that I’ve followed them closely. Lately, there has been quite a bit of conversation surrounding isobutanol and jet fuel. Essentially, investors are talking about the company’s off-land products. At this point, we all know that the company has tackled the air and sea, but what about the land? Today, we’ll dig a bit deeper into the company’s plans with regard to road-use fuels, how this can change the game for the stock, and what we can expect to see from GEVO ahead.

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Is Road-Use Fuel In The Cards For GEVO?

At this point, investors are incredibly excited about Gevo jet fuels and their relationship with Alaska Airlines. They also like the idea of Musket distributing iosbutanol-blended fuel. While I believe that both of these can lead to tremendous growth for the company ahead, investors seem to be missing a big factor here. For some reason, no one seems to be talking about road-use fuels.

I will admit, I am guilty of not paying enough attention to this area as well. However, in a recent interview with Dr. Pat Gruber, CEO at GEVO, I had my eyes opened. Pat was adamant about the fact that it’s important to look at Octane and the work the company is doing there. In fact, here’s what he had to say when we veered onto the topic:

It’s like I said… the interest has been generated from the jet fuel, and we also have isooctane. Everyone forgets about isooctane because I think they don’t understand it. This is something to think about. When people see octane, they think, ‘Oh that’s stuff that’s labeled on gasoline,’ or the ethanol guys all go, ‘Oh, well that’s what ethanol provides, octane.’ That’s not what I’m talking about. What I’m talking about is… if ethanol does 10% of the gasoline, we can do the other 90% of the gasoline. That’s what I’m talking about. That’s a big deal as low-carbon fuels come into play to the future. Because how else will someone get it? We appear to have the only viable technology to make that stuff.”

Isooctane Can Change The Game

Don’t get me wrong, I don’t want to discount the potential of jet fuel or isobutanol in any way. At the end of the day, these products alone could be massively profitable for GEVO. However, I also think that it’s important that we focus on Isooctane. As Pat pointed out in our discussion, octane accounts for the vast majority of the gasoline that we put in cars, vans, trucks, motorcycles, and more.

Knowing this, I’m sure that you understand how this could become profitable. The good news is that GEVO is working in this area as well. The company has created a product known as isooctane, which it also has the ability to scale and sell. Think about what a green octane would mean for the gasoline industry! Think about the profits that this product can bring down the line. At the end of the day, isooctane is something that investors should be watching closely.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Gevo in the long run. When I first started and throughout the majority of my coverage on this stock, I focused on jet fuel and isobutanol and the massive implications these products come with. This alone made me excited for the future. However, after my most recent chat with Dr. Gruber, I’ve become even more excited. Isooctane looks like it could be the goose that lays the golden egg, and it could help to produce a cleaner way of life in the process.

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What Do You Think?

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REN CHK SGY Stock News

Resolute Energy Corp (NYSE: REN) | Chesapeake Energy Corporation (NYSE: CHK) | Stone Energy Corporation (NYSE: SGY)

Energy companies like Resolute Energy, Chesapeake Energy, and Stone Energy are all feeling the pain today, and for good reason. Early this morning, two stories broke that could lead to further supply and demand issues. Today, we’ll talk about these stories, how the stocks reacted, and what we can expect to see from REN, CHK, and SGY ahead. So, let’s get right to it…

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US Oil Supply Data Causes Concerns For REN, CHK, And SGY

As mentioned above, there are two stories that are weighing heavy on Resolute Energy, Chesapeake Energy, and Stone Energy today. One of the biggest of these stories is US oil supply data. At the end of the day, all of these companies are in the energy sector. As a result, they are highly dependent on oil prices. When the value of oil heads downward, the companies feel the pain of smaller revenues and weak profits. On the other hand, when oil is heading up in value, these companies flourish under conditions that lead to strong revenue and profits.

With all of that said, US supply data was released early this morning, leading to tremendous resistance on the price of oil. Naturally, this led to declines in REN, CHK, and SGY. According to the early morning release from the US Energy Information Administration, crude oil inventories in the country climbed in the past week. In the week ending August 26th, crude oil inventories were up by 2.3 million barrels. As a result, there are currently 525.9 million barrels in the inventory at the moment. This increase was far larger than the 900,000 barrel increase analyst expected. So, the data is raising big questions with regard to the balance of supply and demand.

Federal Reserve Could Add To The Pressure

Another big story that REN, CHK, and SGY investors should be tracking closely is the United States Federal Reserve. The central bank has been planning on increasing the Federal Funds rate for some time now. However, poor jobs growth, concerns in the housing industry, and weak consumer spending led to delays in this plan. However, recent economic data has been overwhelmingly positive. For example, early this morning, the ADP National Employment report was released.

In the ADP report, we learned that 177,000 jobs were added by private employers in the month of August. During the month, analysts expected that we would see growth in the amount of 175,000 on average, with estimates ranging from 135,000 to 225,000. This was another major hit to Resolute Energy, Chesapeake Energy, and Stone Energy. After all, the data makes the case for increased rates stronger. Because oil is priced using the USD and interest rates largely dictate USD value movements, this could cause oil to become more expensive in nations around the world, leading to declining demand due to accessibility issues.

What We’re Seeing In The Market Today

We all know that the news moves the market. With the two stories having a negative impact on oil, we’re naturally seeing declines in REN, CHK, and SGY today. Currently (12:48), the stocks are trading at $16.56, $6.28, and $10.66 per share after a loss of $0.58 (3.38%), $0.23 (3.53%), and $0.32 (2.91%), respectively.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively bearish opinion of what we can expect to see from the energy sector as a whole. Because REN, CHK, and SGY are all part of this sector, I’m expecting these stocks to see incredible headwinds ahead. At the end of the day, the argument for higher rates continues to build, and that’s bad news for commodities. This, on top of continued global economic concerns and increasing supply, will likely lead to further declines in the price of oil, and, therefore, Resolute Energy, Chesapeake Energy, and Stone Energy.

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ABX TGD SLW AG Stock News

Barrick Gold Corp. (NYSE: ABX) | Timmins Gold Corp (NYSEMKT: TGD) | First Majestic Silver Corp (NYSE: AG) | Silver Wheaton Corp. USA (NYSE: SLW)

Barrick Gold, Timmins Gold, First Majestic Silver, and Silver Wheaton have all seen better days in the market. While these stocks all saw strong growth in the beginning of the year, as we move forward, we’re seeing more and more downward movement. What happened to the bull run? Are the declines here to stay? Today, I’ll do my best to answer these questions.

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What Happened To The ABX, TGD, AG, and SLW Bull Run?

When we look at Barrick Gold, Timmins Gold, First Majestic Silver, and Silver Wheaton, it becomes clear that they all have one thing in common. Each of these companies is heavily focused on precious metals. Whether it be gold or silver, these companies focus on mining, processing, and selling precious metals. Therefore, they are all at the mercy of market spot prices.

In the beginning of the year, ABX, TGD, AG, and SLW all saw gains, and for good reason. Precious metals were headed upward in value, meaning that these companies made more money. The gains in the values of precious metals came as global economic concerns continued to grow stronger. With the Chinese market crash, Brexit, Japanese economic concerns, and slowing growth in the United States, investors were clamoring for safe havens. Demand for precious metals climbed leading to gains in price. However, more recently, things have started to change.

Economic Conditions Improve As Fed Eyes Rate Hike

As mentioned above, ABX, TGD, AG, and SLW all had a strong first half in 2016, thanks to economic concerns. However, at this point, economic concerns seem to be fading. The Bank of England recently dropped a massive stimulus bomb in an attempt to improve economic conditions. Japan and China seem to be well on their way to a recovery, and investors are expecting to see further stimulus out of Europe. So, on a global scale, economic conditions are improving, leading to declines in precious metals. However, that’s not the whole story by itself.

Another factor that’s leading to declines in Barrrick Gold, Timmins Gold, First Majestic Silver, and Silver Wheaton is the United States Federal Reserve. Throughout the year, the Fed has been waiting on the right time to increase interest rates. In the first half, issues with regard to job growth, consumer spending, home sales, and more hindered these plans. However, at the moment, economic conditions in the United States are improving. As a result, we’re starting to see expectations of a rate hike.

At the end of the day, a higher interest rate out of the Fed would likely hurt the entire precious metals market. After all, gold and silver are both priced using the USD. If the Fed raises its interest rate, it will essentially raise the value of the USD. This would lead to declines in demand for gold and silver, ultimately causing the prices to fall. As a result, we’d likely watch as ABX, TGD, AG, and SLW all took a dive in the market.

Is A Higher Interest Rate Coming?

While I do believe that a higher Federal Funds rate is coming down the line at some point, I don’t expect it to happen in September. While recent economic reports have been positive overall, there is one report that I believe will lead to a delay. That report is the inflation report. In the month of July, consumer prices rose by only 0.1%. That’s a very low number, and it likely means that the Fed’s 2% annual inflation target will be missed. As a result, I don’t think we’re quite ready for a rate hike. With that said, further economic growth around the world is still likely to add pressure to ABX, TGD, AG, and SLW. So, while I don’t think a rate hike is coming, I do believe that it’s going to get worse for these stocks before it gets better.

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Potash Corporation of Saskatchewan Inc POT Stock News

Potash Corporation of Saskatchewan Inc (NYSE: POT)

Potash Corporation of Saskatchewan is having an incredible day in the market today, and for good reason. The company was featured in a Bloomberg report with some exciting news. According to sources, the company is planning on merging with Agrium (AGU). Today, we’ll talk about the merger plans, how the market reacted to the news, and what we can expect to see from POT stock moving forward.

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Pot Soars On Merger Rumor

As mentioned above, Potash is having an incredible day in the market today after a report was published saying that the company was planning on a merger. We know that few things get investors more excited than mergers and acquisitions. So, this was huge news.

According to the sources, POT will be merging with AGU. Perhaps more importantly, the sources added that a deal may be announced as soon as next week. However, no final decisions have been made so there’s still time for either company to call off the move.

How Likely Is The Merger

When these types of stories break, they are often deemed false right away. However, this is a very unique case. Instead of simply starting a rumor, Bloomberg has actually reached out to both companies and received a response. In their response, the companies said that they are in talks, but there is no assurance of a deal quite yet. So, we know that there is a bit of validity to the rumor here. However, is a merger really likely?

In my opinion, the answer is yes. Fertilizer companies have been struggling recently. This is the result of slumping crop prices causing financial pressure all the way down the line. By joining these two industry leaders together, POT and AGU will likely create a whole that is greater than the sum of its parts. The company will likely have less overall expenses, a stronger sales force, and stronger products if they decide to join forces. So, I do believe that an acquisition could happen.

How The Stock Is Reacting To The News

As mentioned above, nothing seems to excite investors quite as much as news of mergers and acquisitions. This case is no different. On both sides of the equation, the stocks are gaining in a big way. Currently (12:36), Potash Corporation is trading at $17.71 per share after a gain of $1.66 per share (10.34%) thus far today. AUG is currently trading at $94.70 per share after a gain of $5.22 per share (5.83%) thus far today.

What We Can Expect To See From POT Moving Forward

Moving forward, I have a very mixed opinion of what we can expect to see from POT moving forward. All in all, everything depends on this merger. Before the leak of the information surrounding these talks, the stock was dealing with heavy downtrends. However, now the stock is climbing dramatically. If news that the merger talks ended without a deal breaks, this stock is likely to fall right back to where it was and continue its slow and steady downtrend. However, if a merger is announced, we could see massive gains. At the end of the day, it’s a toss up for me with one deciding factor.

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Silver Price News

Silver has been a very interesting commodity to watch throughout the year 2016. After massive gains in the first half, however, we’ve started to see declines, and they are continuing today. Nonetheless, September is going to be a big month for the global economy, and that will likely play a major role in the price of silver. Today, we’ll talk about why economic releases will likely be the driving factor in price movements in the month ahead, what releases you should be watching for, and what we can expect to see moving forward.

Why Economic Releases Will Likely Drive Silver’s Price Up Or Down In The Month Ahead

If we look at silver throughout the year, one fact becomes overwhelmingly clear. Poor economic and market conditions early in 2016 were the driving factor with regard to the price growth we’ve seen in the precious metal. However, economic conditions seem to be changing, and safe-haven demand is starting to fall off. Many investors aren’t sure what to expect and are looking to economic data in order to find some answers.

After all, in many ways, silver is a safe-haven investment. This means that when economic and market conditions are positive, we can expect declines in demand and price. Adversely, when economic and market conditions are negative, we can expect see gains. Another major factor in the month ahead is the USD.

Because silver is priced using the USD, the two assets have an incredible inverse relationship. However, the month ahead is likely to bring news for the USD. With recent economic improvements in the United States, investors are expecting that the Federal Reserve will raise the federal funds rate. If the central bank decides to do so, they will essentially be adding value to the USD. Because silver is priced using the USD, this will make the precious metal more expensive around the world, leading to declines in demand due to accessibility issues. As a result, the price of the commodity could fall hard.

Economic Stories That Silver Investors Should Be Watching

As mentioned above, there are several big economic stories around the world at the moment, and, really, if you plan on investing in silver or own the precious metal, you should be watching them all. Nonetheless, there are some stories that will likely cause much more movement than others. They include:

  • Federal Reserve – Watch the Federal Reserve closely. At the moment, the majority believe that strengthening in the job market, housing market, and consumer spending will lead to a rate hike. Janet Yellen also hinted that chances of a rate hike are higher due to an improved economic outlook. The FOMC meeting for the month will be happening on the 20th and 21st. So, the big movement will happen around this time. However, any economic developments leading up to this meeting will likely lead to big movements in the price of silver. Remember, positive developments pertaining to the US economy will likely lead to declines in silver while negative developments will likely lead to gains.
  • ECB – Another big story to watch here is the European Central Bank. Following the Brexit, the bank has taken little action in an attempt to improve conditions in the region. However, with mounting pressure from consumers and investors as well as the looming shadow of the Bank of England stimulus package, many believe that the ECB will unleash its own stimulus efforts. The ECB meeting will take place on the 8th. If further stimulus is put into place, it could add more resistance on silver, as investors will have yet another reason to ditch safe havens.
  • Asian Economy – Recently, we’ve seen sluggish reports out of China, and Japan continues to work to improve economic conditions in the country. Both of these economies are incredibly important to the global picture. As a result, these are also going to be incredibly important stories to watch.

What I’m Expecting To See

All in all, I do believe that silver has more room to grow in the long run. However, in the short term, conditions seem to be improving on an economic front, and the market is starting to head back upward as well. As a result, I’m expecting to see more declines throughout the month of September. Nonetheless, keep in mind that new monetary policies that are stimulating economic movement are highly experimental. Therefore, safe-haven demand isn’t likely to completely dissipate, helping to slow downward trends and find support for future price growth.

What Do You Think?

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Gevo Inc GEVO Stock News

Gevo, Inc. (NASDAQ: GEVO)

Gevo has been a very interesting stock to watch as of late, and for good reason. Throughout the past several months, the company has been the topic of various press releases having to do with green energy and company growth. We’ve seen flights with Alaska Airlines, we’ve seen a contract with Musket, and now investors are wondering what we can expect to see next. In a recent discussion with Pat Gruber, the CEO of the company, he brought up something that could be the next big thing in clean energy. Today, we’ll talk about what that is and why I maintain such a bullish opinion on GEVO.

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We Know About Isobutanol, What Else Is There At GEVO?

So, we know about isobutanol, and it’s an exciting thing for Gevo investors. However, as mentioned above, in a recent discussion with Pat, he brought up isooctane. Like most people, I wasn’t so interested in this because I really didn’t understand what it was. When we see octane at the pump, we think oh… OK, it’s some kind of additive that makes gasoline work. However, that’s not the case at all, it actually represents about 90% of the gasoline that we put in our vehicles.

In our conversation, Pat explained that isooctane is the wave of the future, and that GEVO is the only company that appears to have the technology to generate it. Moving forward, this could be a massive thing. Here’s what Pat had to say about isooctane:

It’s like I said… the interest has been generated from the jet fuel, and we also have isooctane. Everyone forgets about isooctane because I think they don’t understand it. This is something to think about. When people see octane, they think, ‘Oh that’s stuff that’s labeled on gasoline’, or the ethonol guys all go, ‘Oh well that’s what ethanol provides, octane.’ That’s not what I’m talking about. What I’m talking about is… if ethanol does 10% of the gasoline, we can do the other 90% of the gasoline. That’s what I’m talking about. That’s a big deal as low-carbon fuels come into play to the future. Because how else will someone get it? We appear to have the only viable technology to make that stuff.”

After this discussion, I looked into what octane actually represented in gasoline. After doing so, I’ve come to the conclusion that if GEVO can get a low carbon, renewable, clean octane to the market, it will likely be the goose that lays the golden eggs for the company and its investors.

Isooctane Is Down The Line, Isobutanol Is Now

The reality is that, when it comes to Gevo, there are several reasons to be excited. In the long run, isooctane will likely prove to be a huge thing for the company. However, right now, the focus is on isobutanol. At the end of the day, the company has already put together an agreement with Musket for the distribution of isobutanol blended fuels. The company has already sold jet fuel derived from isobutanol to a major airline that then flew commercial flights on that fuel and said they would buy more. At the end of the day, isobutanol has tons of potential to drive revenue for the company in the very near future.

Mixing The Two Is A Match Made In Heaven

At the moment, there are quite a few questions revolving around Gevo. People want to know what the demand for isobutanol blended fuels will be, how the product is being marketed and more. Not to mention, they want to know what’s coming down the line. With the shift toward green energy around the world, I believe that the answers to all of these questions are likely positive. Demand for a cleaner fuel to run vehicles on is likely huge. Isooctane can fill that demand. In the mean time, there’s promising news surrounding isobutanol. Between the two, we have the here and now and we have the strong future prospect. As a result, I’m expecting to see gains in the stock ahead.

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Resolute Energy Corp REN Stock News

Resolute Energy Corp (NYSE: REN)

Resolute Energy has been on an incredible run this month, reaching an intraday high of $20.22 per share earlier this week. However, more recently, we’ve started to see downward movement. In my opinion, the downward trends we’re seeing are just the tip of the iceberg. At the end of the day, there’s a storm coming, and it’s time to abandon this ship. Today, we’ll talk about why we’ve seen such incredible gains on the stock throughout the month, what we’re seeing in the market today, and why REN is likely to see big declines ahead!

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Why REN Has Been Gaining In The Market

At the end of the day, there are two primary drivers to the bullish activity surrounding Resolute Energy as of late. Those factors include:

  • Continued Drilling & Increased Production – On August 8th, REN released its report for the second quarter. While earnings left much to be desired, investors cheered production news. In the report, the company announced that the board had approved continued drilling in 2016. The report also showed that production improved from 9,016 barrels in the first quarter to 11,865 barrels in the second quarter.
  • Potential Oil Production Freeze – Another big story that helped in the bullish run we’ve seen from REN recently came on August 15th. On this day, investors cheered Saudi Arabia’s apparent willingness to work with other oil producers in an attempt to freeze production at current levels. This helped to send oil on a rally, pushing Resolute Energy up with the commodity.

What We’re Seeing In The Market Today

While the stories above helped to push REN upward in the market throughout most of the month, we’ve been seeing declines recently. Those declines are continuing today in a big way. Currently (2:11), the stock is trading at $16.21 per share after a loss of $1.66 per share (9.29%) thus far today.

These Declines Are Nothing Compared To What’s Coming

Sure, REN is down in a big way today, but the declines we’re currently seeing are likely just the beginning. In fact, I’m expecting to watch as this thing tanks. The reason is relatively simple. First and foremost, investors cheered increased Q2 production. However, that production actually proved to be a dramatic decline if you look at it on a year-over-year basis, and an even larger decline compared to the same quarter 2 years ago! So, quarter-over-quarter, production may be up, but it’s still nothing to be happy about. Not to mention the loss of $2.44 per share produced through the quarter shows that there’s plenty to be desired here.

The other factor helping to push Resolute Energy stock upward is fading as well. While Saudi Arabia mentioned that it would be willing to work to freeze oil production levels on the 15th, we haven’t heard anything about it since. So, hopes of a production freeze are starting to fade, leading to declines in oil yet again.

At the end of the day, REN is a horrible investment. Given both the state of the oil market and the current state of the company, it seems like there’s only one direction this stock can go. That direction is downward! So, if you’re still in on this one, you may want to strongly consider finding your exit point.

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Stone Energy Corporation SGY Stock News

Stone Energy Corporation (NYSE: SGY)

Stone Energy Corporation has been an incredibly interesting stock to watch as of late. While the stock has been hit by the low price of oil, recently we’ve been seeing some strong bullish activity. In fact, we’re seeing that activity today, even with the price of oil declining. So, what’s the deal? What’s causing the trend? Is the bullish movement on SGY likely to continue? I’ll do my best to answer those questions today.

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Why Is SGY Gaining?

When we look at the overall oil market, we’re seeing some bad news. The price of the commodity is falling. However, somehow, Stone Energy, a company that is heavily exposed to spot prices, is seeing strong gains. One big question that may come up when we see movement like this is, “Why?”

The reason is actually relatively simple. Recently, Saudi Arabia said that it would be willing to work with other oil producers to freeze production. This led to a bullish frenzy surrounding oil, pushing the price of the commodity skyward. As a stock that is heavily exposed to the oil spot price, this was incredible news for SGY.

Since then, investor excitement surrounding the stock has been building. After all, when you see your shares gaining, and you’re making money, it gets exciting. Because investors move the market, this excitement can keep a trend going for longer than it probably should. In my opinion, this is what we’re seeing from SGY at the moment.

What We’re Seeing From The Stock Today

As mentioned above, Stone Energy continues to advance in the market, building on investor excitement. Currently (1:02), the stock is trading at $11.57 per share after a gain of $0.97 per share (9.15%) thus far today.

Is This Trend Likely To Continue?

At first glance, you may be considering getting involved. After all, we’re seeing strong momentum in the upward direction. Nonetheless, it’s important that you know that this really is a dangerous trend. With fundamental data suggesting that the stock should be declining, and gains actually happening, we can expect SGY to fall hard when the stock hits resistance. If you don’t sell at the right time, you could end up losing a pretty big chunk of money.

Moving forward, I have a relatively bearish opinion of what we can expect to see in the long run. The reason for my opinion on this is simple. SGY is a company that is dug deeply in the energy and oil sector. Therefore, the stock is at the mercy of the price of the commodity. With hopes of a coming oil production freeze fading, we’re finding ourselves back in the same position that we were in before the recent bullish activity surrounding oil. At the end of the day, there is still no answer or solution for the current supply glut. In fact, producers are working to increase production, rather than stabilize spot prices. As a result, I’m expecting to see declines in the value of oil ahead. This movement will likely lead to declines in the value of Stone Energy stock as well.

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Uranium Resources URRE Stock News

Uranium Resources, Inc. (NASDAQ: URRE)

Uranium Resources is having an incredible day in the market today, and for good reason. The company announced that it has staked out a new claim. Today, we’ll talk about the details of the new claim, how the market reacted to the news, and what we can expect to see from URRE ahead.

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URRE Stakes A New Claim

As mentioned above, Uranium Resources is having an incredible day in the market today after an announcement that it has staked a new claim. The announcement came in the after-hours time frame, and the stock has been soaring ever since.

In the announcement, we learned that URRE has staked about 4,600 acres of placer mining claims. The claims cover prospective targets for lithium-enriched brines in the Columbus Salt Marsh area in west-central Nevada. The new target area has been given the name Nina Project.

This is an incredible move for URRE. In fact, the claim shows that the company is working to broaden efforts into other energy commodities. Essentially, we’re seeing increased value in energy-based commodities, and the company is looking to take advantage of that. In a statement, the company had the following to offer:

The acquisition of the Nina Project signals URI’s intent to expand and broaden our corporate efforts into other energy metal commodities, synergistic with the Company’s existing business operations and technical capabilities, in order to create increased shareholder value through exposure to rapidly expanding global energy demand. URI has advanced its internal program of target identification, exploration and evaluation rapidly, and is now actively acquiring lithium prospects to build a robust and prospective lithium project portfolio.”

How The Stock Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with the news. Adversely, negative news will generally lead to declines. The news that was released with regard to Uranium Resources was overwhelmingly positive. After all, the new claim not only opens the door to new potential revenue, but it also broadens the company’s prospects with regard to the minerals it mines. All in all, it was an incredibly strong move, and investors are showing their support. Currently (12:48), URRE is trading at $1.68 per share after a gain of $0.36 per share (27.64%) thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from URRE. At the end of the day, the company is doing an incredible job expanding its focus. Lithium is a very much in demand material that is used in various ways when it comes to energy. With demand for energy-synergistic resources climbing, it’s a great idea for the company to move in this direction. All in all, it seems like Uranium Resources is making the right moves at the right times. As a result, I’m expecting to see gains ahead.

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REN, CHK, SGY Stock News

Resolute Energy Corp (NYSE: REN) | Chesapeake Energy Corporation (NYSE: CHK) | Stone Energy Corporation (NYSE: SGY)

Recently, it’s been incredibly fun to watch energy companies that are focused on oil like Resolute Energy, Chesapeake Energy, and Stone Energy. That’s because we’ve seen a recent spike in the value of oil, thanks to comments made by Saudi Arabia. However, I’m expecting oil to take a sharp dive relatively soon, and that’s likely to weigh heavy on these stocks. Today, we’ll talk about the statements coming out of Saudi Arabia that lifted oil, why I believe oil will fall from recent highs, and what we can expect to see from stocks like REN, CHK, and SGY ahead. So, let’s get right to it…

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Saudi Arabia Gives A Boost To REN, CHK, And SGY

The three oil and energy stocks that we’re tracking all have one thing in common. They are incredibly exposed to spot market prices of oil. Therefore, anything that sends oil upward in value will likely send Resulute Energy, Chesapeake Energy, and Stone Energy up as well. However, when oil declines in value, these stocks decline as well.

One of the big issues with oil has been the fact that Saudi Arabia hasn’t been able to reach an agreement with other leaders in the production of oil around the world. So, production has continued to grow. However, last week, the energy minister in Saudi Arabia said that the country would be willing to do what it takes to reach an agreement. As a result, investors saw a higher likelihood of reduced production, which would send oil’s value up and support growth in REN, CHK, and SGY. So, we saw strong movement last week as a reaction to the news.

Why Oil Is Likely To Fall Hard Ahead

While I would love to say that recent gains in the value of oil are likely to stick around, I simply don’t believe that’s the case. At the end of the day, oil, REN, CHK, and SGY all have a high likelihood of falling hard ahead. There are a few reasons for my opinion on this:

  • We’ve Seen This Before – This isn’t the first time that Saudi Arabia said that it would be willing to do anything within reason to reach an agreement that would boost the price of oil. In fact, we’ve seen it several times over the past year. Nonetheless, a deal never comes to fruition. So, at this point, claims like these are likely hollow. I’m not expecting a deal to come of this. Unfortunately, that’s bad news for Resolute Energy, Chesapeake Energy, and Stone Energy alike.
  • US Oil Rig Count Continues To Grow – The truth is that oil production continues to grow, and that’s going to weigh heavy on the commodity. In fact, we recently received the rig count for the United States. In fact, we just tracked the 8th week in a row where US rig counts were up. Last week, that count grew by 10. This type of trend is what we’re seeing around the world, and it’s a horrible one for oil.
  • China Exports – On top of that, we recently received data with regard to exports in China. Recently, the country has started to ramp up exports of refined oil products in a big way. This will further flood the market, leading to more declines. Another hit to REN, CHK, and SGY alike.

Where These Stocks Are Headed

While I would love to say that REN, CHK, SGY, and other stocks in the sector are going to see gains ahead, I don’t believe that will be the case – at least not in the short run. The bottom line here is that we’re still dealing with a massive supply glut. In sheer disregard of this issue, producers around the world continue to increase production, and that’s only making matters worse. All in all, I’m expecting to see these stocks drop from recent highs relatively soon!

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What Do You Think?

Where do you think REN, CHK, and SGY are headed moving forward? Join the discussion at TalkTRENDZ!

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