U.S. oil and gas stocks were expected to get hammered Monday, as members of the Organization of Petroleum Exporting Countries and other oil producing countries failed to reach an agreement in Doha, Qatar, on Sunday to cut or cap production (with a refusal by the not-in-attendance Iran). But they didn't.

While the price for West Texas Intermediate crude oil was down 7% at one point Monday morning to $38.99 a barrel, the NYSE Arca Oil 7 Gas Index, which includes names like Anadarko Petroleum (APC) - Get Anadarko Petroleum Corporation Report , Occidental Petroleum (OXY) - Get Occidental Petroleum Corporation Report and Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report , was actually up slightly at midday.

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The reason? Oil production reductions elsewhere. An oil worker strike began in Kuwait, where production has been more than halved to 1.1 million barrels per day. There also have been recent supply losses in Nigeria and Kurdistan due to pipeline sabotage and Libya's production is down about 1 million barrels due to political unrest. U.S. production also continues to decline -- it is now under 9 million barrels per day -- and rig counts have hit all-time lows and are trending lower.

Analysts at Piper Jaffray unit Simmons & Co. International wrote in a note that while the news out of the weekend was negative, the real fulcrum of the rebalancing in the oil markets is being driven by non-OPEC countries contracting rather than expanding, with 2016 expected to represent the first contraction in non-OPEC production since 2008. "The asymmetry for oil prices is higher rather than lower over the next two years," they noted.

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So is now a good time to pick up oil and gas stocks?

Tudor, Pickering, Holt & Co. thinks it is. It said it would be buying stocks on the oil market weakness with the fundamentals improving recently. It likes Gulfport Energy  (GPOR) - Get Gulfport Energy Corporation Report along with Chevron (CVX) - Get Chevron Corporation Report , EOG Resources (EOG) - Get EOG Resources, Inc. (EOG) Report , Concho Resources (CXO) - Get Concho Resources Inc. Report , Rice Energy (RICE) - Get RICE ACQUISITION CORP. Report , Baker Hughes (BHI) , Halliburton (HAL) - Get Halliburton Company (HAL) Report and Schlumberger (SLB) - Get Schlumberger NV Report .

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Jason Wangler, who follows oil and gas stocks at Wunderlich Securities, has a buy rating out on Gulfport along with Pioneer Natural Resources (PXD) - Get Pioneer Natural Resources Company Report , Bill Barrett (BBG) and Callon Petroleum (CPE) - Get Callon Petroleum Company Report . Stifel recommends Pioneer and Concho along with Noble Energy (NBL) - Get Noble Energy, Inc. (NBL) Report , PDC Energy (PDCE) - Get PDC Energy, Inc. Report , Parsley Energy (PE) - Get Parsley Energy, Inc. Class A Report , Synergy Resources (SYRG) and Cimarex Energy (XEC) - Get Cimarex Energy Co. Report .

Bad things could still happen that could bring oil prices even lower. Seaport Global Securities estimated that OPEC could push production as high as 33 million barrels per day in the third quarter after a crude oil balance tightening in the second and third quarters. It also thinks demand growth could easily decelerate if prices go up too much, so the bias is very likely going to tilt back to a higher surplus to maintain price pressure on Iran, Russia and tight oil producers in North America.

The KLR Group said it expects Iran to gradually increase production to 3.6 million barrels a day by early next year (it was at 3.5 million recently, versus its pre-sanction level of 4 million barrels). It anticipates Saudi Arabian production will stay stable at 10.1 million to 10.3 million, Russian output will go slightly over 11 million barrels and Iraqi volumes will increase 500,000 this year with continued development of the country's southern fields. Tudor, Pickering, Holt  said Saudi officials suggested over the weekend that they could quickly ramp up production to 11 million barrels a day, which would have the most negative near-term outcome but is probably unlikely.