Heat a deep pot over medium to high heat. Add oil & butter to the pot. Add onions to pot as you slice them. When all the onions are in pot, season with salt & pepper and 1 tsp. fresh thyme.
Cook onions 15 - 18 minutes, stirring frequently, until tender, sweet & caramel colored. Add bay leaf & sherry to pot & deglaze the pan drippings. Add stock & cover pot to bring to a boil.
Arrange 4 small, deep soup bowls or crocks on a cookie sheet. Preheat broiler to high. Once soup reaches a boil, remove and discard bay leaf and ladle soup into bowls. Float toasted bread on top of soup & cover each bowl with a mound of cheese. Sprinkle remaining fresh thyme on cheese & place cookie sheet with bowls on it under hot broiler until cheese melts & bubbles.