Although it’s tempting to describe sky-high commodities prices as being the latest ‘bubble’ to hit the markets, for commodities such as crude oil and corn, basic supply and demand may be pushing up prices. This from The Wall Street Journal:

Prices, to be sure, are soaring — crude oil fetched $132.19 a barrel in New York on Friday, up 103% from $64.97 a year earlier. Yet crude has posted similarly massive increases a number of times in the past three decades. Most notably, in the spring of 1980, as gasoline lines lengthened, the price of crude oil was 150% above the year-before level.

That price spike was caused mainly by a production cutback by the Organization of Petroleum Exporting Countries — coupled with the fact that consumers had few alternatives. But over time, the high prices spurred conservation by consumers and increased exploration and production in non-OPEC countries. Oil prices collapsed.

The episode is a textbook example of the huge price swings that can occur when supply and demand are relatively inelastic in the short run, but not in the long run, says Harvard economist Greg Mankiw, who cited it in an economics textbook he wrote.

“There are plenty of opportunities out there for investors looking to capitalize on the world’s long-term needs for oil,” says Alexander Green at InvestmentU.com.

Alex says there’s a new gold rush on in Alberta, Canada.

“In Alberta’s oil sands, energy companies don’t drill for oil. They dig it up. After excavation, giant trucks three stories high — carrying up to 400 tons of oil sands — carry it off to a processing plant.

“There, the sands are heated in a cell where the oil comes to the top of the water and the sand drops to the bottom. This oil froth is then sent to an upgrader and eventually to a refiner. Is this oil really as good as the stuff coming from Saudi Arabia?

“Actually, it’s better. According to Clive Matter, Chief of Shell Canada, this oil is “absolutely as good as it gets. In fact, it even trades at a premium because it’s high-quality crude oil.”

“And here’s the kicker: Exploration of Alberta’s oil sands is virtually risk-free. You can’t drill a dry hole here. There’s no drilling at all. It’s a mining operation - and the reserves are thoroughly outlined. So what you really need is a company with plenty of machinery, money and manpower to dig it up and process it as quickly as possible.

Read on here to learn about the one stock you should own to profit from the tar sands ‘gold rush.’