Even four hurricanes have failed to disrupt the current energy rally.

With oil near $50 a barrel, the super majors are swimming in profits despite the stormy season. True,

BP

(BP) - Get Report

did say on Monday that Hurricane Ivan -- the most powerful of the recent storms -- hurt production levels during the latest quarter. But the company still managed to produce 11% more fuel that it did in the same period a year ago.

Bob Howard, author of the investment newsletter

Positive Patterns

, is impressed but not surprised.

"Any time production rises 11% in this business, that's huge," said Howard, who doesn't invest in the stocks he covers. "But to me, there's not much real news to look at in the oil business."

Unlike many, Howard has long assumed that oil could hit $50 -- or higher -- and stay there without a huge "correction." He concedes that some industry executives still worry about another oil bust. But he believes that rising demand will protect against a major plunge.

"There's a bull market in energy stocks," he says. "And it isn't over yet."

Sneak Preview

After watching BP soar to a four-year high last week, however, some investors began cashing in their profits following the company's update on Monday. The stock slid 1.5% to $57.32 despite expectations of another strong quarter.

Oil prices were about 45% higher than they were a year ago. Production, while down 2% from the second quarter, rose from year-ago levels despite the hurricanes and planned outages. Refining margins, also down from the second quarter, nevertheless remained strong. Meanwhile, production at BP's Russian venture continued to ramp up.

Last year, BP bought a 50% stake in Russia's TNK in an effort to capitalize on that country's growing oil industry. More recently,

ConocoPhillips

(COP) - Get Report

laid out a similar strategy when it announced plans to buy a 20% interest in Russian energy giant Lukoil.

Jacques Rousseau, an analyst at Friedman Billings Ramsey, last week raised his price target on ConocoPhillips' stock following news of the acquisition. He expects the investment to add up to 75 cents a share to the company's midcycle earnings. As a result, he believes the company's stock -- up 47 cents to $84.54 on Monday -- will hit $90 a share.

Rousseau sees the acquisition as an important avenue of growth for the company.

"Our initial view of ConocoPhillips' potential 20% investment in Lukoil and the strategic alliance between the companies (announced today) is positive," he wrote on Wednesday, "as it allows COP

to expand its reach in Russia, a region considered to hold significant growth and higher return opportunities."

But Harry Chernoff, an analyst at Pathfinder Capital Advisors, likes some pure-play refiners even better. He says that three refiners --

Premcor

(PCO)

,

Tesoro

(TSO)

and

Valero

(VLP)

-- are profiting handsomely from the "extremely wide" spread between sweet and sour crude because all three are equipped to process the cheaper, sour oil. Meanwhile, he said, a refiner like

Sunoco

(SUN) - Get Report

enjoys no such advantage. He is, therefore, long Valero and short Sunoco.

Mixed Opinions

In contrast, Chernoff has bypassed the super majors altogether. He points to the ConocoPhillips deal in Russia as an example of the challenges facing the industry. And he isn't necessarily upbeat about BP, either.

"BP has the same problems the other super majors have," Chernoff says. "It has no alternative but to look for very large oil fields that require very large amounts of money and take very long periods of time to develop. ... It's a very difficult thing to do ... but they don't have a choice if they want to stay super majors."

Chernoff views smaller exploration companies "that don't need billion-barrel discoveries to turn a profit" as more attractive. Howard agrees that smaller companies, such as

Apache

(APA) - Get Report

, can succeed with much smaller projects than the majors can. Indeed, he says that Apache has become so successful by snatching up castoffs from companies like ExxonMobil that suddenly become attractive with oil at $50 a barrel.

But many experts still doubt that current oil prices will last. David Edwards, president of Heron Capital Management, believes that recent disruptions -- caused by the hurricanes and political unrest in Venezuela -- have driven oil to record highs. Ultimately, he expects oil to follow gasoline downward and settle below $40 a barrel.

Still, Edwards always tries to invest 5% of any portfolio in energy and points out that such holdings -- including both super majors and oil services companies -- have risen between 16% and 30% in a year.

"High oil prices are not good for the economy," Edwards acknowledges. "But we always have energy stocks, so they're good for us."

Still, Howard believes that investors have poured too little money into the sector.

"Everybody's light in energy," he says. "There is still this reluctance on Wall Street to get involved in these stocks."

Howard still recommends buying

Shell

(SC) - Get Report

, despite the strong rebound the company has enjoyed since slashing its reserves. He also suggests at least holding on to the other super majors. Looking ahead, he predicts poor results for those who favor some popular stocks instead.

"The analysts stubbornly and wrongly cling to their 'energy-prices-will-drop' scenario that just HAS to be true -- but, in fact, is false," Howard says. So "I think a lot of money managers are going to get killed this year because they've got the 'sexy' stuff."