For investors in energy stocks, this hasn't been a happy time. I can tell you as a longtime trader of oil and oil stocks that they almost always run in tandem. A falling price for crude oil has meant a cratering price in oil stocks, particularly the ones most engaged in oil exploration and production right here in the U.S. -- names such as EOG Resources (EOG - Get Report) , Continental Resources (CLR - Get Report) , Pioneer Natural Resources (PXD - Get Report) and Cimarex (XEC - Get Report) .
There's an opportunity here, however, if you haven't bought shares of these stocks already. Right now is a great time to start a position in these and other oil stocks at "for sale" prices, because this oil swoon is going to be short-lived.
When most analysts dissect the falling prices of oil stocks, they point to the increasing production of shale players here in the U.S., combined with recent bad data points in both Europe and China. They're overemphasizing these factors while ignoring one financial factor: the strength of the dollar. Oil barrels are priced in greenbacks, and a rising dollar will put financial pressure on oil prices.
You can see how clear that financial relationship by looking at a chart of the dollar index against the index of oil stocks:
If you see the dollar as the prime mover of oil stocks, you start to get a better perspective of what those stocks are ultimately worth. We know that the recent strength in the dollar is a function of policies of the Federal Reserve and European Central Bank and much less about the fundamentals of real supply and demand for oil -- which remain very bullish indeed.
Individuals looking for profitable long-term investments should look for companies that have great prospects for increased growth and profits. U.S. oil producers have such prospects, because they're still benefiting from a revolution in oil shale. It's best to buy such stocks at a discount, when they're getting pummeled by outside forces unrelated to their business prospects. Now is one such time, as the Fed is perceived as ready to tighten U.S. money supply while the Europeans (and perhaps, the Chinese) are preparing to ease theirs.
It is almost a perfect storm of opportunity in shares of U.S. oil producers.
As the monetary policies both here in the U.S. and abroad become clearer, the dollar will find its balance. Oil prices will then again respond to the fundamentals of still-increasing global demand and a global supply that is under multiple threats in the Middle East and Russia.
Smart and patient investors will be willing to sit with very cheap U.S. oil stocks that are only temporarily under pressure.
At the time of publication, the author was long XEC.Follow @Dan_Dicker
This article is commentary by an outside contributor and separate from TheStreet's news coverage.