NEW YORK (TheStreet) -- The discussion about Iranian oil on or off the market is a sideshow compared to the platonic shifting in the energy space. Yes, Iranian embargoes by European countries may have a slight short-term influence on world prices, but three years from now it won't even be remembered. Increased European sanctions are scheduled to begin in July.Iran may have to take less for its oil. However, it's naive to believe Iran will not find a willing buyer. It's simple economics and it trumps the will of politicians every time. All it takes is one consuming nation with the capacity to buy oil on the cheap. It's difficult to even imagine a heavily discounted price as the list of countries willing to buy at a small discount is well beyond the capability of Iranian production.
USO appears oversold on the daily chart based on technical analysis but make no mistake, the relationship between SPY and oil is decoupling. USO is circling the event horizon (point of no return near a black hole) and will soon fall in. Not all energy stocks are oversold, and the S&P Energy Select ETF XLE ( XLE) represents energy producers and recently bounced off of lows.
There are companies dedicated to producing engines and infrastructure to make natural gas refueling stations as common as diesel is today. Clean Energy ( CLNE) has operations in refueling stations, systems, and vehicle conversion technology. Cummins ( CMI) and Westport's ( WPRT) joint venture "Cummins Westport" builds the engines for long haul truck operators and others to use natural gas instead of diesel. Cummins Westport is not alone; both Ford Motor ( F) and General Motors ( GM) are producing vehicles capable of using natural gas as their fuel. It's Ford and General Motors vehicles that really make the case for falling future gas prices. As companies like Clean Energy produce increasingly more public refueling stations (about half are public), Ford and General Motors will have an easier time marketing vehicles tied to natural gas. The major automakers are not able to turn on a dime to produce natural gas vehicles and even if they could, there is a refueling location issue (Clean Energy is working full speed along with other smaller companies to solve this issue), but they don't need to start selling the vehicles yet. As long as the wheels are in motion (which they are) oil prices have little reason beyond temporary catalysts to trade higher. The forward-looking nature of the stock market has impacted more companies as well. (Read why I believe gold is well on its way back to $1,200 an ounce.) As the cost of energy falls, just about every product in the market will have deflationary pressure. Take a box of macaroni and cheese, for example. The actual food product cost is 30% of the cost of energy into putting the box of food on a grocer's shelf. Lower energy costs equal greater spending by consumers, in turn lifting corporate profits and lifting the SPY. Natural gas will also allow Ford and General Motors to produce lower emissions and cost to operate vehicles. Expect consumers, the overall market, auto makers and natural gas producers to win and high-cost oil producers to struggle. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.