Even if energy prices have fallen, investors believe that it is still a good time to buy oil stocks.

Bill Smead, chief investment officer at Smead Capital Management, believes that even if oil prices have dropped significantly from their recent highs, there is still a case to be made for investing in oil stocks. 

According to what he said on Thursday's episode of "Street Signs Asia" on CNBC, the reason for this is that it is quite possible that the price of energy will continue to be high or perhaps increase even further.

He referred to the recent decline in crude oil prices as "the first substantial correction" in a bull market that began in the spring of 2020 following a price crash. This bull market began after prices had fallen significantly.

According to Smead, "You have this enormous shift, you go from $20 a barrel to $120 and then you come back," and now people are saying things like "Oh yes, that's all over, that's going to fix the inflation right there."

However, he said that there are a number of indicators that point to an increase in pricing.

He pointed out that there is still a shortage of supply despite the fact that the United States needs to replenish 180 million barrels of strategic reserves that were depleted to fulfill demand.

He wondered, "What happens when China's economy gets open in full... get through their quarantines and just get out," implying that demand will begin to rise once more.

This year, covid flare-ups in China have sparked lockdowns, which have led to a decrease in energy usage in the world's most populated country.

When additional mobility limitations are loosened, there will most likely be a rebound in consumer demand.

"We are bullish on the oil equities in this market. "Warren Buffett is buying it here, so you can purchase it if you want to," Smead remarked.

This year, the price of a barrel of Brent oil and the price of a barrel of West Texas Intermediate crude in the United States both climbed to levels above $120 per barrel, but they are currently trading at $96.88 and $90.88 per barrel, respectively. Despite this, both standards have increased by more than forty percent in comparison to the previous year.