The long energy rally could still have plenty of fuel. For starters, some major oil companies appear poised to report another record quarter. For another, well-equipped refiners -- capable of processing heavily discounted crude oils -- have found themselves pocketing a load of extra cash. And for the foreseeable future, some experts now believe, rising demand and tightening supplies will combine to keep energy prices high. "The energy bull market has just begun," insists Bob Howard, author of the investment newsletter Positive Patterns. "As you know, energy has been a sweet place to be -- and that is not going to change." Over the next two weeks, the oil majors will announce results for the final quarter of what proved to be a banner year for the group. Friedman Billings Ramsey analyst Jacques Rousseau expects at least three of those companies -- ConocoPhillips ( COP), ExxonMobil ( XOM) and Total ( TOT) -- to set records. He believes these companies will report strong results across all their major business lines. To be sure, the companies have delivered impressive numbers so far. During the first nine months of the year, ConocoPhillips grew revenue by 22% -- and profits by a whopping 56%. Industry giant ExxonMobil increased both revenue and profits by nearly 20%. And Total expanded revenue and profits by 14% and 17%, respectively. Howard, for one, is hardly surprised. Unlike many, he has long considered high energy prices -- which powered last year's rally -- as long term in nature. Even now, he calls the chart for the major energy index "exceedingly bullish" and ready to move even higher. And he sees bargains in the energy drilling and equipment index as well. Thus, Howard continues to recommend a number of energy stocks -- especially National Oilwell ( NOI), Schlumberger ( SLB) and Oceaneering International ( OII) -- even as they keep climbing. And he suggests that skeptical analysts give up and join his bullish camp. "Still clinging to that 'Oil will come back to $25' story?" he asks of Wall Street. "Isn't that getting a little stale?"
To be sure, some analysts -- waiting for an oil plunge -- are starting to sound resigned. Fadel Gheit of Oppenheimer has long portrayed oil as overpriced. He blames a large terror premium and "excessive speculation" for the rise. But he doubts that oil will correct itself anytime soon.