The rise in uranium prices appears to be accelerating, with the price of the nuclear fuel increasing by its highest ever amount last week as the demand-supply balance tightened.

Spot uranium prices jumped to $72 a pound this week, according to the Ux Consulting (UxC) website, a leading publisher of uranium prices and priceforecasts.

Uranium is not traded on any formal exchange and buying and selling of the element is highly regulated in order to avoid unofficial stockpiling.

The UxC website said that the price rose last week by 9.9 per cent from $65.5 a lb, pushed higher after an auction ended on December 15, the highest weekly rise in the 38-year spot history. The auction of 260,000 lb was held by Mestena Uranium, a small Texas-based uranium producer.

Uranium prices have more than doubled this year, with most of the price increase coming in the latter half of the year.

However, uranium prices have yet to exceed peaks of the late 1970s when they reached about $42 a lb, equivalent to about $100 in today's prices after adjusting for inflation.

The price of uranium, used to fuel nuclear reactors, have more than tripled since the end of 2003. This is a result of 20 years of demand exceeding supplies, which has caused global stockpiles to fall by 800m lbs.

Global uranium supply was estimated at 108m lbs last year, compared withglobal consumption of 180m lbs.

The surge above $70 per pound for uranium has already exceeded analysts prices forecasts for 2007. Over the past two months, investment banks have raised their forecasts after the flooding of the Cigar Lake uranium project in Canada in late October.

Cigar Lake project, which is managed and 50 per cent owned by Cameco, the world's largest uranium miner, was estimated to produce about 15 per cent of global mine supply from 2008. Just before the flooding, uranium prices were trading well below $60 per lb.

In October, UBS, the Swiss-based bank, raised its forecasts for uranium (U3O8) by 20 per cent for 2007 and 2008 to $71 and $75 a lb respectively due to more demand from new nuclear power generating capacity.

The rise in uranium has lead to hundreds of uranium mining hopefuls listing shares on the Australian, London and Toronto stock exchanges in the past 18 months.

First Uranium Corp shares rose 20 per cent on its debut on the Toronto Stock Exchange on Wednesday, and was up another 2 per cent yesterday.