To one of the sharpest energy minds around, Friday’s spurt in the price of crude to a record $58.60 a barrel is yet another sign that it’s still up, up, and away for oil and energy stocks.

“The new news is we’re in a $50 to $75 per-barrel oil world,” said Alan Gaines, a former crack institutional energy analyst and energy investment banker who is currently CEO of Dune Energy, a small Houston-based energy producer, primarily of gas, that’s 78% owned by Itera Holdings, Russia’s second-biggest gas producer.

Mr. Gaines has appeared in this column a number of times over the past two years because of his energy expertise and the fact he’s been dead on in his forecasts for oil prices and energy stocks.

My first interview with him on the direction of oil came shortly after it had risen to about $40 a barrel. At that time, most energy experts ridiculed the notion of oil trading in the $40 to $45 a barrel range for any appreciable length of time. Not so, said Mr. Gaines, who predicted that oil was headed to $60 to $70 a barrel, sooner rather than later.

In a weekend chat, he insisted there is no letup in sight for oil prices and torrid energy stocks.

Short term, he said, “the price floor is no longer $40 a barrel, but $45 to $50.” He figures we’re easily looking at a rise to the low $60s within the next few weeks or a month, which he views as a prelude to a further advance to $75 to $80 over the next few years. (Goldman Sachs and T. Boone Pickens are both on record with forecasts of an eventual rise to $100 a barrel.)

Though Friday’s high of $58.60 a barrel was an all-time high, Mr. Gaines points out that in inflation-adjusted dollars, oil actually traded at $80 in 1980. Interestingly, that was during a period when oil demand was actually falling – from 18.8 million barrels a day in 1978 to 15.2 million barrels daily in 1983.

Mr. Gaines tells me what’s startling to him is that even with oil over $58.50 a barrel, there has been no letup in demand for refined products.

To support his case for higher oil prices, Mr. Gaines cites the following:

* OPEC has said it has lost the ability to control pricing; likewise, it no longer has incremental production.

* Global demand is very strong, with tremendous incremental demand from America, China, and India.

* Bottlenecks in Russia and Saudi Arabia have resulted in very little incremental capacity.

* Oil inventories have declined in three of the last four weeks after building earlier this year.

* Oil demand should rise another 2.5% next year.

* Russia and the larger OPEC producers are years and hundreds of billions of dollars away from significantly increasing capacity.

* Norway, a major oil producer (1 million barrels a day), faces a strike by its oil workers.

* Given the ongoing threat of terrorist activity and supply disruptions, the premium in the price of oil should remain at roughly $15 a barrel and could swell to $20.

As far as energy stocks go, Mr. Gaines believes at present most reflect an oil price of $35-$38 a barrel. “But once investors realize we’re living in a $50 to $75 per-barrel oil world, they’ll reprice energy stocks accordingly,” he predicts. Though not good for the guy at the gas pump, higher oil prices, he said, is a boon to the investor since it means higher earnings, higher cash flow, and higher stock prices, along with fatter dividends and more stock buybacks.

Speaking of stocks, which are the best energy buys? Mr. Gaines believes his top picks have the potential to climb 25% to 50% over the next 12 months. They are Anadarko ($82.51), Chesapeake Energy ($23.29), Pogo Producing ($53.60), Devon Energy ($49.24), Comstock Resources ($25.95), and Arena Resources ($12.90).