This column was originally published on RealMoney on July 25 at 9:56 a.m. EDT.

Two, maybe three years before oil goes down. That's my takeaway from the conference calls last week from the two most important companies in the industry of finding oil and gas,


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(HAL) - Get Report

. You can't drill big without bringing in these companies. They have the best overview, the best vision of what's going on worldwide.

Their vision shows that it is only now, just now, that the big reserve countries are starting to drill again.

In both cases, these two companies point out that the Middle East, where the accessible reserves are, is just now beginning to take these prices seriously and is beginning to explore more drilling. The time from drill to the pump, though, will be a couple of years.

I don't believe most market practitioners have a clue about how short-sighted this industry is. Every time the price of oil has jumped in the last 30 years, every country and every company has gotten on the bandwagon to find and drill, only to become laughingstocks and fools in the eyes of Wall Street. The collective thinking went something like this: "You can fool me only so many times. We are not going to open and explore new fields; we will just pump a little more and it will cool the price."

Well, it didn't. Not this time.

It was only


quarter that the major countries, Russia, Saudi Arabia, Mexico, Norway, started realizing that the price is for real. Only now have the big projects that could meet the demand gotten started.

To me, that means "Get used to these prices." We won't see any decline in them until these new fields -- not drilled yet -- come online. That will be 2007 at the earliest.

Which is why these stocks spiked, and will spike again. Because at last, the high price per barrel is translating into new orders and projects.

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Random musings:



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not done going up, but it should pause. ...


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finally getting credit again, after a prolonged period of underperformance. ...

bebe stores



Urban Outfitters

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get the nod from Jeff Vinik, according to the papers, which should be good for another couple of points for those two hotties. ... What was the


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bear case again? ... How

pathetic is this


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