Offshore Nambia is quickly becoming one of the world’s greatest frontier oil provinces.

The risk factors surrounding the nation’s oil industry are through the roof. The action is costing unprepared investors a lot of money. For proof, ask Delta Petroleum (NYSE:DPTR) shareholders.

Since the stock market bottomed out in March, the Nasdaq 100 index has led the way forward, with a 55% rally, with the Dow and S&P 500 not far behind.

Oil rose above $68 a barrel on Tuesday, reversing earlier losses, supported by a weaker dollar and ahead of inventory data expected to show a fall in crude stocks.

Gold rallied from a six-week low hit earlier in the global session, rising above $923 per ounce with currency fundamentals proving the dominant factor as the dollar got stung by concerns over U.S. indebtedness.

The nation’s refining industry is taking a nosedive today thanks to a report from Valero. The markets are reacting like all refiners are going down in flames. It is not the case by any means. Take advantage of the mistake.

“Investing in agriculture today will be like investing in the oil sector in 2001-2002,” writes Mark McLornan in the May issue of Marc Faber’s Gloom Boom & Doom Report. McLornan runs a fund that invests in farmland. Some of his on-the-ground observations confirm many of the things I’ve been telling my readers for the past several years.

Experts roundly agree that the recession is only a short-term blip in the long-term escalation of oil prices. And this time, there are 1.05 trillion reasons why oil is going to climb well past its peak last year.

Oil rose to the highest level in about four months above $54 a barrel on Thursday as expectations that economic stimulus packages might be working to offset the impact of high oil inventories.

It looks like it will be another volatile week in the energy markets. On one side of the balance, a tremendous economic slowdown and an overabundance of oil are pushing prices down, while the other side of the balance, rather empty until now, has the threat of a major strike propping prices up.  Here’s two ways to play it.