Increasing prices will have a huge effect on every aspect of your life, from the price of your food, to how much you'll pay at the gas pump, to the cost of heating and cooling your home.

Nearly everything in our lives revolves around oil.

While demand for oil continues to grow, we are now coming to the realization that like all other resources, oil is finite and output is now in terminal decline.

This has the oil industry stuck on a treadmill, running faster just to stand still.

The Globe and Mail reports, "conventional oil supply (the type of low-cost fuel you can afford to burn) has not grown since 2005, and may never grow again."

The U.S. Department of Energy has concluded that 2009 will be the last year that oil production will keep up with consumption. And if the government is making this admission, it's safe to say the situation is far more urgent.

On top of this, as the standard of living for people in developing and emerging countries increases, so does their consumption of oil. A recent article in Reuters said that over 1.3 million vehicles were sold in China during the month of September alone, up 77.8% from the same time last year.

Trading bicycles for brand new oil-burning cars is a trend that is quickly gaining momentum.

And so, the question becomes: if demand is already outstripping supply, where will we find the oil needed to satisfy the billions of new consumers just coming online... protect our own lifestyle... and avoid a dangerous global tug-of-war over this dwindling precious resource?

As dire as this situation sounds, the truth is, we're not running out of oil. Far from it in fact. What we are running out of is the supply of cheap, conventional oil we've grown accustomed to. And for investors, this has opened a whole new window of opportunity.

The solution for tomorrow's growing demand will be solved by the industry's other oil play — namely Canada's massive oil-sand deposits.

The promising outlook for the Canadian oil sands is two-fold:

the easy oil is not so easy anymore
the cost of oil sands production has decreased because of the improvements in technology

And as for why I like Canada (and particularly Alberta) over other sources of oil sands, the answer is simple. Canada has the best upside for oil sands in the world, with ready-available infrastructure and a stable political system. Venezuela and Russia lack important criteria, infrastructure and political stability.

This chart from Statistics Canada tells an interesting tale. In 2008, investment in Alberta's oil sands reached a record high of $19.2 billion, a 14% increase over 2007, even after oil prices fell below $34 per barrel. Now that prices are close to $80, development and research will only increase in this proven and reliable resource.

Another noteworthy plus for Canada is a change in the accounting principles, providing the majors with a more favorable financial uptick from the oil sands reserves. Within the next few years, this should offer a tremendous upside for the majors, providing excellent growth potential.

If you're interested in learning more about the future of oil, and also which stocks I believe will have the best potential to capitalize on the coming increase in oil prices, now is the ideal time to sign up for my advisory service, Casey's Energy Report. This publication is full of must have information for investors who want to make informed decisions.

Due to extraordinary response, we are extending our special year-end offer... for one week only.

Until January 31st you can get a 1-year subscription of Casey's Energy Report for only $595 – that's $400 off the regular retail price. Plus, as a special gift, you'll receive 12 issues of Casey's Extraordinary Technology – a $995 value – FREE of charge.

In the next year or two, the price of oil will be dramatically higher. That's why there's never been a better time to get on board with my favorite stocks and stake an early positioned in the explosively profitable oil sector. For more details, click here.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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