Why oil investors are still smiling

The oil price still hasn't peaked - and that means there are rich gains to be had by investors. We pick two of the best buys in the stockmarket and suggest where the industry's brightest new prospects are to be found.

With the rise of China and India, demand for oil is soaring. But supply will remain constrained. That means a soaring price and rich gains for investors. Jody Clarke and Eoin Gleeson report

Before Iran released the 15 British hostages earlier this week, the gloom and doom pundits were out in force. They were worried the situation would escalate and somehow (be it via airstrikes or sanctions) have an impact on oil imports from the region. Every day, 17 million barrels of oil are shipped through the Strait of Hermuz. That's a fifth of global oil exports, so a disruption would have been a nasty business, creating what Goldman Sachs called a "very significant impact on oil balances" and an immediate market shortfall of a couple of million barrels a day. No wonder, then, that the oil price crept up throughout the crisis to end Tuesday (the day before the release) at $67.81 a barrel, 8% higher than it was when the hostages were first taken.

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