Violence in Iraq watch out for an oil price spike:

The escalation in violence in and around Bagdad is likely to have a spill over effect in the rest of the region. The sectarian violence is based on the two main Muslim sects and the different views have been causing problems for centuries.

The religious fighting appears to be pushing Iraq into a civil war and because the war is based on differences in religion it is quite likely to spread to other countries in the region. When the violence spreads you can be assured that there will be disruptions in the supply of oil out of this region to the rest of the world.

Investors should be prepared for higher oil prices in the near future owning oil producers that are not dependent on the Middle East for supply are an excellent hedge against a spoke in crude oil prices.

The Canadian market offers a number of producers to choose from, I would look first at companies with long life reserves such as Suncor (SU), PetroCanada (PCA), Canadian Natural Resources (CNQ) and Nexen (NXY). All of these companies have the majority of their properties in safe secure areas of the world.


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