Canadian Oil has long been underestimated as people believe that the US imports the majority of its crude oil from Saudi Arabia and other middle eastern countries. However, quite the opposite is true; the United States, the "oil addict", brings the majority of its oil in from Canada every year, and the numbers keep growing. What most people don't know is that Canadian Oil Reserves could be the largest in the world, as there havn't been any significant discoveries in the middle east in quite some time, and the royal family will not allow an audit of its reserves (whose numbers havn't changed since almost 2006). So as you can tell the Arabic Oil on which the US "depends" is actually in question. Are there really as many barrels in the ground as they say? As a massive emerging economy, China's oil addiction is growing every year as well, and they will need an oil rich nation to depend on in the coming years. Canada's vast reserves of oil make its currency, the Canadian Dollar, what we call a commodity currency. This means that as the dependence on Canadian Oil increases and like wise the profits, the currency will follow suit, so you win on two levels. That is what makes Canada an A+ oil play, especially if the Saudi's are not being truthful about their reserves. This is an excellent investment for the coming years; as the rate of inflation within the US is set to rise the Canadian Dollar will be a good hedge against a devaluing currency. Companies like
Husky Energy(HSE:TSX) will see nice gains through their future and they will also provide you with quarterly dividends in Canadian Currency. The idea behind this investing technique is that when you purchase stocks on a foreign exchange like the Toronto Exchange (TSX) your US Dollars are converted into Canadian Dollars, and likewise down the road when you cash out, your money will be converted back. So you actually profit on 3 levels, first the stock itself will increase in price, second the currency will increase in price (or at least act as a hedge against a sliding US Dollar), and third the dividends are like a sign on bonus that you receive either quarterly or annually based on the company.
Use your head, Invest wisely and the profits will follow beind...
