An Australian firm that tracks uranium trends worldwide expects a period characterized by relatively stable uranium spot market prices. But it's likely to be a brief interlude.

Resource Capital Research of Sydney says forward indicators suggest the price will range between $90 and $100 per pound for several months, then accelerate to $125 by September 2008.

On Dec. 24, the price for a pound of U308 was at $90, up from $85 three months ago. The price peaked six months ago at $138.

"Uranium fund sentiment and activity remain important factors in the outlook for the spot uranium price," a Resource Capital Research report indicates.

"The funds are thought to hold about 20 million pounds U3O8, which represents a significant percentage of the annual spot market volume, of about 18 million pounds to 28 million pounds. This leaves the spot market price susceptible to further fund activity."

Despite a recent decline in price, market fundamentals remain strong, the report said. Planned and proposed nuclear power reactors worldwide increased from 222 in January to 316 in October, or 42 percent.

"China has announced 116 planned and proposed new nuclear power reactors, up from 63 in Jan. '07 (an increase of 84 percent), and the USA is up from 23 in Jan.'07 to 32 units (up 39 percent)," according to the report.

Robert Gregory, uranium specialist for the Wyoming State Geological Survey, said interest in the state remains strong. Operators have reported a shortage of drilling rigs.

The Powder River Basin, the Gas Hills and the Great Divide Basin are expected to remain hot spots in 2008. New production is anticipated next year in the Gas Hills and in the Moore Ranch area of the Powder River Basin in 2009.

Despite recent price fluctuations, production costs have been running around $40 a pound while the spot price has been much higher, so uranium remains attractive, Gregory said.

"Overall, they're pretty optimistic about where the price is going to be," he said.

Business Editor Tom Mast can be reached at tom.mast@trib.com, or call 307-266-0574.