The price of oil sends a ripple effect throughout the world, affecting every country’s economy, the cost of all goods and services, and the availability of basics including food and shelter. Until such time as a viable alternative is discovered, commercialized and accepted by industry and governments worldwide, oil will remain the lifeblood of the world economy.

Worldwide demand for oil is currently around 76 million barrels per day, predicted to rise to more than 90 million barrels per day by 2020. World oil production has been essentially flat since the beginning of 2005, with significant reductions projected in the years ahead.

The bottom line is that oil is a non-renewable resource. Many academics, industry analysts and consultants believe that we are at or nearing "Peak Oil," that point in time at which demand outstrips projected supply. The situation will not improve; it can only grow more dire.

Basic economics dictate an inexorable rise in price as supplies dwindle and demand continues to ratchet up, though we predict that energy prices will remain volatile over the short term.

At PetroPortfolio, we view this coming crisis as a significant opportunity for investors. In no other industry is it possible to predict in advance such a dramatic delta between supply and demand. Add the geopolitical and economic importance of energy to the equation, and one thing becomes clear: those firms that succeed in finding oil and gas will create significant returns for their shareholders.