If nuclear energy has become a do-not-go zone for investors following the devastation that has hit Japan over the past several days, you might think that other energy-related investments would be picking up the slack in terms of investor interest.
That's not the case, though. While markets are taking a tremendously bearish view on nuclear energy -- they have driven down the stock prices of Canadian uranium producers by double digits over the past two days -- they are apparently feeling downbeat about the alternatives, too.
On Tuesday, U.S. crude oil fell a further $2.49, though it's up modestly at midday today.
Canadian energy stocks in the S&P/TSX composite index pared their losses in Tuesday afternoon trading, but they remained 7.4 per cent below their high point earlier this month, suggesting that few investors see oil producers benefiting from a shift away from nuclear energy production.
Meanwhile, the price of natural gas has risen a mere 3.4 per cent over the past three trading days, and remains in line with its average price over the past two years - which is very low.
Are investors betting that the world's energy needs are about to disappear?
According to Ian Bigney, vice-president and energy analyst at McLean Budden in Toronto, the apparent muddled state of energy markets relates to a shift in attention away from political tensions in the oil-rich Middle East and North Africa.
"Instead of talking about the triumph of people overthrowing their repressive governments, people are talking about the tragedy in Japan," he said. "And any threat to global economic growth, you see energy prices retreat a bit."
At the same time that concerns about global economic growth are on the rise, oil prices may have risen too far, too fast last week, when they touched two-and-a-half year highs above $100 a barrel. Though concerns about supply persist, now demand concerns have entered the picture.
True enough, if much of the world's nuclear energy production was shut down because of the tragedy in Japan, oil demand would spike higher. But despite Tuesday's news that Germany is going to shut down seven nuclear reactors, nuclear energy is probably here to stay.
"I would be surprised if there is any change in the interest level in developing countries, where they have been most aggressively pursuing nuclear energy," said Henry Groppe, founder of the Houston-based energy analysis firm Groppe, Long & Littell, pointing to China and India as examples.
"The greatest reaction has been in places like Germany, where there is a much-less aggressive pursuit of nuclear energy."