By Charlie Brown

What are Canadian Oil Stocks?

These are stocks issued by companies that explore for, produce, and refine oil. Most of these companies have their headquarters in Canada but also get to explore for, produce, and refine oil in other countries too.

Canadian oil stocks, as well as the companies involved are subject to various regulations and royalties that either bring profits or losses. The best way to profit from oil stocks is to invest over a long period of time, by investing a reasonable portion.

The companies that offer these kind of oil stocks profit a lot during periods of high oil prices, and are able to offset price declines by producing more oil. Even as you invest in these stocks, you ought to understand that junior Canadian oil is highly risky and should only be pursued by aggressive investors.

If you do invest in the best oil stocks of the Canadian market, be sure to follow a well- balanced portfolio that has a three successful investor strategy at heart. This strategy involves:
– Investing mainly in the well-established companies

– Spreading your money out across most, if not all, of the five main economic sectors – consumer, finance, manufacturing and industry, resources and commodities, and utilities.

– Avoiding stocks in the broker limelight.

How do you gauge the peak oil?

Peak oil is the notion that the production of the world oil will reach a maximum rate and then go into a fatal decline. This kind of situation has happened in the past and caused millions of losses for people who did not look ahead.

Studying the past oil production is vital to help you make a possible prediction of the seasons that oil is likely to hit the maximum rate. Reputable oil companies always get good business predicting when the world is running out of oil. This helps them support their argument for a favorable tax treatment from the government so that they can have more money for exploration.

In the final decades of the 20th century, the peak oil theory has gained stature particularly when the oil prices are on the rise. Each revision of the theory however, only pushes the coming peak in oil prices a few years further into the future.

Today most people do not talk about peak oil theory because production methods and targets have changed, and the past can no longer determine the future. As you take up investment in oil stocks, it is important to understand that no one knows what the price of oil will be in the next 10 years. This largely depends on a lot of volatile factors that include political and environmental factors.

Thanks to technology, a lot more oil is now available for production than what was there in the past, and better new oil sources are coming up around the globe. This creates a stable ground for oil production, as well as for investors, giving them a better future to look forward to.

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