Saudi Prince Talal bin Abdul-Aziz Al Saud told BBC Arabic that “anything could happen” if King Abdullah Bin Abdul Aziz does not proceed with a program of political transformation.

He said: “King Abdullah... is the only person who can carry out these reforms. On his departure, may that be in many years to come, latent trouble will surface and I have warned of this on many occasions. We need to resolve the problems in his lifetime.”

And besides this very important statement, we have those nasty and worrisome developments in Bahrain, Iran, Libya, etc.

The two major oil benchmarks, Brent crude oil (Brent is the biggest of the many major classifications of crude oil that is used to price two-thirds of the world's internationally traded crude oil supplies) at $102.82 and WTI (West Texas Intermediate, which is the underlying commodity of New York Mercantile Exchange's oil futures contracts) at 85.94 a barrel represent another “worrisome price difference” of nearly 18 percent between the two benchmarks.

Wednesday, Brent closed at $103.78, which was its highest since September 2008.

All this highlights the growing insecurity in the Middle East and North Africa. There is really no quick serious settlement of these problems on the horizon.

Now, for those investors who like “commodity” currencies, I think the time, maybe, has come to consider switching some Australian dollars (AUD) for Canadian dollars (CAD) or even Norwegian Kroner (NOK).

But for now, at least, let’s stay with the Canadian dollar. Here’s why I prefer it over the Australian dollar. In this context, I don’t think that a lot of investors have serious doubts about China further “tightening” this year. I’d say that when, not if, China (which is major trading partner of Australia as well as of Canada) does continue to tighten in earnest, then we can expect some pretty significant ramifications to ensue to the downside for both. Both countries are in the same boat.

Nevertheless, it’s in Canada’s oil producing capacities that we have the huge difference. It’s a fact that Canada’s proven oil reserves, which include their oil sands, are the second largest in the world at 175.2 billion barrels. Therefore it should not come as a surprise that we have seen an 89 percent “inverse” correlation ship between USD/CAD pair and the price of oil since 2000 on a weekly closing basis. And here we have that huge difference between the Australian and Canadian economies.

On an oil production per day basis, the latest numbers I have at hand are from 2008, show that Canada produced 3,350 bbl/d and Australia 586 bbl/d. This is extremely important in today’s world and investors should keep these statistics in mind should political uncertainty across North Africa and the Middle East further underpin the risk premium attached to oil, Brent as well as WTI.

We also should not forget the Canadian dollar’s performance during the OPEC oil embargo of 1973/74 that gives as a hint how investors could use the Canadian dollar as an appropriate means to ride out any sharp spike in energy prices. Remember, prior to the oil embargo which began in October 1973, crude oil was priced at about $3 per barrel.

By the end of 1974, the price had quadrupled to over $12. In these times, first the Canadian dollar had lost 3.5 percent to the U.S. dollar over the 15 months preceding the oil embargo, but appreciated a solid 5 percent to perform a life time high of 0.9577 in April 1974 to the U.S. dollar.

The Canadian dollar’s performance in April 1974 was all the more significant given that over much of that period, the U.S. dollar index had risen 16 percent through to January 1974.

I think we could see such a Canadian dollar phenomenon again if things in North Africa and the Middle East should spin out of hand. I prefer the Canadian dollar over the Australian dollar.

But energy is not the only factor that works in favor of the Canadian dollar.

This week, we got the news that Moody's has placed the long-term, senior unsecured debt ratings of major Australian as well as New Zealand banks on review for possible downgrade.

No doubt this could lead investors that have benefited from owning commodity currency, which is the Australian dollar, in recent months to consider shifting their weightings more towards the Canadian dollar. I think, in complete accordance with literally all the actual technical indicators suggesting we are bound for a retest of the April 1974 low of 0.96 Canadian dollar against the U.S. dollar.

Yes, the Canadian dollar should perform better than its Australian counterpart.

Also tellingly, currencies flows indicate that the Canadian dollar’s recent gains have been supported by real demand with the buying continuing at much the same pace that it has since the start of the year, which in fact has been a continuation since August 2010.

However, it’s also interesting to take notice of the fact that we observe a curious split in behavior between the investment patterns of the domestic Canadian investors and the cross border investors into Canada over the course of the past year. Curiously, it has been Canadian investors rather than overseas players that have been the principal buyers of the Canadian dollars.

Moreover, while it appears that those international investors that have placed money into Canada have focused on the equity markets at the expense of fixed income instruments, and this behavior pattern amongst investors based in Canada has been almost the reverse.

I agree there are certainly many ways of interpreting this curious divergence, but in my opinion this suggests that Canadian investors hold a far more negative view of the world, in fact a view I share with them, than the surprisingly optimistic, liquidity fueled, position that seems the norm at present.

To me, and I don’t think this is an overstatement, it looks like Canadian investors are, at least, looking beyond the recent pullback in the oil price in WTI but also look at the spiking prices in Brent and they believe that over the longer term demand for oil will only continue to grow.

Given the continued political uncertainty that continues to spread in the Middle East and North Africa, this sounds like the Canadian-based investors making a reasonable call.