What happens when U.S. oil consumers are forced to pay $7 a gallon? Ask them over the next five years.

If you thought T. Boone Pickens' $125 oil prediction was a shock, CIBC World Markets' chief economist Jeff Rubin is predicting $200 oil in the next five years.

Oil production, says Rubin, will "barely grow over the next five years, edging up barely more than 1-million barrels a day over the next three years, and only half a million barrels a day between 2010 and 2012." And those increases could fall short of demand, leading to $150 barrel oil by 2010, and $200 a barrel by 2012.

Imagine what you'll be paying at the pump when that happens. I know I'll be taking a bike to work.

And it isn't so far-fetched given higher demand form developing countries like India. "However, surging prices would cause demand to ease in the United States, with gasoline prices, already averaging US$3.60 a gallon, climbing to well over US$4 a gallon this summer and as much as US$7 a gallon by 2012," he said.

Sure, the forecast goes against conventional thinking that slower global and U.S. economic growth will drag oil below $100, but anything's possible these days. Who'd have thought we would have seen $119 oil back in 2000?

And it's not as if we don't have solutions to the problem.

One of the solutions is to dig for oil here in the United States. We've told you about Bakken.

We've told you that:

• Up to 4.3 billion barrels of oil could be recovered from the Bakken shale formation - a 25-fold increase compared to its initial assessment in 1995.
• And that the Bakken is the largest "continuous" oil accumulation ever assessed by the USGS.

One of the "must own" stocks is Kodiak Oil (KOG:NYSE).

The other three can be found in the Bakken report issued by "The $20 Trillion Report." Those plays are reportedly up 54%, 31% and 30% as we speak with further upside potential.

But to understand the full potential of Bakken-related stocks, take a look at what happened to stock associated with the Canadian Oil Sands. The same potential is hidden in Bakken-related stocks.

• Since late 2003, for example, Western Oil Sands (bought by Marathon Oil) ran more than 1,500%.
• Since April 2003, Suncor Energy (SU:NYSE) ran from $15 to more than $110 - a 633% move.
• And from its lowest point of 1998 to 2000, the Canadian Oil Sands Trust returned as much as 19,900%. These days, it trades at $45, a still impressive gain of 1,025% from its 1998 lows.

This is the type of explosiveness we're looking for with Bakken stocks.

Take care,

Ian L. Cooper
http://www.energyandcapital.com

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In case you missed our other investment opportunity highlights, here's what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of April 21, 2008.

U.S. Economic Collapse: How to Protect Your Assets With Troubling Times Ahead
You don't have to look very far in the news to see one shocking headline after another. The New York Sun suggests that America is on the verge of food rationing while the Washington Post reports that burglaries have surged 21% in Washington DC, the absolute heart of the United States, because of a slumping economy.

Gas Saving Tips: Easing the Pain of $4 Gas
I usually reserve my personal gas saving tips for July, when the summer driving season is in full swing. Unfortunately, we don't have that much time. In order to keep your car fuel efficient, I've scrounged up ten tips you can use to squeeze every penny you can out of each gallon of gas.

High Gasoline Prices Are Here to Stay: Debunking the Myths about High Gas Prices
Big Oil controls only about 10% (at best) of the world's remaining oil reserves, and their share of daily production is slowly eroding. They have reached the point where the oil they produce is coming out of their total reserves, because they can't replenish it with new-found oil anymore.

Retail Gasoline Hits Record High in the US: Average of $3.51 per Gallon
The average price U.S. drivers paid for gasoline soared to a new high of $3.51 a gallon, rising 11.9 cents over the last week, according to the federal Energy Information Administration.

Subprime Resets: The Reset Catastrophe of 2009
"The folks who say the housing market will stabilize anytime soon must be smoking some really strong stuff," says Dean Baker, co-director of the Center for Economic and Policy Research in Washington.

Biotech Stocks: 276% Gain Potential and More in Biotech
We've waited long enough for the next biotech boom... and it's finally here. But be warned, when these stocks start moving, there's no stopping the run, which makes buying the undervalued, beaten down, and cheap biotech stocks crucial. "The high price [GlaxoSmithKline] it is paying for such early-stage research underlines the current hunger among large pharmaceutical companies for promising biotech assets," mentioned Reuters after GlaxoSmithKline bought Sirtris Pharmaceuticals (SIRT.O) for $720 million in cash.

Whitney vs. Merrill, Citigroup, and Wells Fargo: My Money is on Whitney's Call
Months after issuing a dire forecast for Citigroup, the stock now trades at $24, with a forecast of even more doom and gloom from Meredith Whitney. It was Halloween 2007 when she suggested that Citigroup was a growing train wreck since the ratio of tangible assets fell to 2.8%, the lowest in decades. She even said Citigroup may have to cut its dividend, raise cash, or sell assets to raise more than $30 billion to raise capital.

Shiller: 30% Drop Likely: Bottom? No Way
As my colleague Ian Cooper noted yesterday in The Trader's Pit Blog, California foreclosures have literally gone off the charts. In fact, with the current pace over 517 new filings a day, serving foreclosure notices must be the only thing California deputies are doing these days. But there was more bad housing news on the day. Existing home sales came in light again according to the National Association of Realtors.

Owning Visa at $23...
Credit delinquencies are at 16 year highs. There's no relief for consumers, especially with oil jetting to $120. And more than 2.6% of all bank loans are 30-days delinquent. Write offs are up 24%. Late payments are up 16%. Yet, COF is a buy because of a P/E ratio. Come on.

That's all for this week... Have a great weekend.