While nothing in the stock market goes up forever, when it comes to the high-flying energy stocks, some pros seem utterly convinced otherwise.

Their bullish reasoning is simple enough: Worldwide oil supply is diminishing, a good chunk of it is located in politically unstable countries, and oil needs from such galloping economies as China and India are swelling. Accordingly, some pros insist gushers and not dry holes lie ahead for energy stocks, which are up 22.4% so far this year after three years of outstanding performance.

John Wilkens, a priest who seems to share this view, recently said to me via e-mail: “I pray I am not too late to the game, but I think energy stocks are the best ones to own and plan to buy some for my grandchildren to help see them through college. Do you see any immediate risk in doing this and which ones would you consider the best values?”

There are certainly near-term risks, some energy experts say. A major one is that the price of oil, up 41% since August and currently hovering near $100 a barrel, could take a fast dive if there’s any indication of a settlement of the Iranian nuclear crisis. While there’s no sign this could come to pass soon, and numerous press reports say American plans for military action against Iran are already in the works, there are solid efforts under way to resolve the issue, which some political watchers think is clearly possible and shouldn’t be ruled out.

Because oil presently carries an estimated fear premium of $15 to $20 a barrel, several energy trackers suggest any meaningful headway in easing the crisis could quickly knock down that premium by $5 to $8. Such an occurrence could lead to widespread dumping of the commodity by oil traders and hedge fund managers, many of whom have been big speculators in the commodity.

One of Wall Street’s most respected energy analysts, Oppenheimer & Co.’s Fadel Gheit, sees serious risk for oil buffs. He told me about six weeks ago that he thinks a settlement of the Iranian standoff with America is a distinct possibility, and he says he expects it sooner than later. As such, he’s advising that the price of oil — which he believes is worth no more than $45 a barrel on fundamentals — will tumble to about $55 in the next two to four months. In the same period, he looks for energy stocks to drop at least 10% to 20%. Another significant risk to the price of oil is the threat of a recession, the possibility of which is increasingly popping up in economic forecasts. A recession here — which a number of economists consider a 50% possibility — would have an immediate impact on the global economy, including Europe, which is already experiencing a slowdown.

Yet another detriment to the maintenance of oil’s current lofty price tag, some say, is the possibility that OPEC, which kicks off a new round of meetings today, could ease price pressures by raising production. That could be no more than wishful thinking, however, because such OPEC members as Algeria and Iran have both expressed their opposition to such an action.

As far as individual energy stocks go, veteran investment adviser Richard Moroney figures two of the best values around are Conoco Phillips ($78.93) and Valero Energy ($67.66), both candidates, he believes, for 15% to 20% market appreciation over the next 12 months. The shares of the two are down 5% and 8%, respectively, from their July highs, but Mr. Moroney, director of research at the Dow Theory Forecasts newsletter, sees strong fundamentals, sizable stock buyback programs, and the high price of oil helping both stocks make up lost ground.

Conoco has been hurt by the seizure of its Venezuelan production assets, leading to a $4.51 billion writedown in the June quarter, and weak guidance on third-quarter refining margins. Mr. Moroney, pointing to steadily rising 2008 earnings estimates over the past five months and plenty of cash generation, contends that solid year-ahead and long-term capital gains potential and the stock’s recent weakness offer investors an appealing entry point. A projection of lower than expected third quarter earnings — well below Street estimates — spurred in part by lower refining margins and rising raw material costs, has taken its toll on Valero, North America’s largest petroleum refiner. But Mr. Moroney sees better days ahead, noting demand remains strong. Likewise, he points out that, given relatively tight inventories, tight industry capacity utilization, and no new refineries being built, the outlook for refiners remains favorable. Further, he says, with Valero selling at just seven times trailing 12-month earnings of $9.76 a share, the stock already reflects a fair amount of the bad news.

Still, the bottom line should not be ignored: Nonstop stock market gains are strictly a myth.

dandordan@aol.com