About a year ago, I wrote an article in one of my newsletters about a highly-successful Toronto money manager named Eric Sprott who had given a speech predicting oil would hit $200 a barrel in the near future. At the time, the price of crude was well below $100 a barrel so it's not surprising that many people were skeptical. In fact, a few even wrote to me suggesting Mr. Sprott had lost it – this despite the fact the mutual fund he runs churned out 30%+ annual returns in five of the seven years from 2001 to 2007. (In the other two, the gains were a paltry 13%.)

Today, of course, he looks like a genius. With oil flirting with $150 a barrel, can $200 be far behind? Of course, we could see a much-desired pull-back in the price, but to what? Oil could drop 25% from today's levels and it would still be priced at over $100 a barrel. And any respite will almost certainly be temporary. As soon as the next economic upturn begins (and it will happen, trust me!) the price will shoot higher again. That's why we at The Canada Report newsletter continue to be bullish on high-quality oil stocks. In our first issue, published in January, we recommended that readers buy shares in Canadian Oil Sands Trust, which trades on the Toronto Stock Exchange as COS.UN and over the counter in the U.S. under the symbol COSWF.PK. At the time, the price was C$37.20. On July 10, they closed on Toronto at C$51.25.

Many investors have never heard of ArcelorMittal (NYSE: MT) and will probably be surprised to learn it is the world's largest steel maker.

Headquartered in Luxembourg, ArcelorMittal has 311,000 employees in more than 60 countries on five continents. This decentralization is especially significant in the context of rising oil prices; the fact that MT has production facilities close to every major market significantly reduces transportation costs.