Even though energy prices have gone down, an investor says oil stocks are still a good buy.

Bill Smead, chief investment officer at Smead Capital Management, says that even though oil prices have dropped sharply from their recent highs, there is still a reason to buy oil stocks. He told CNBC's "Street Signs Asia" on Thursday that this is because energy prices are likely to stay high or even go up even more.

He said that the drop in crude prices was "the first major correction" in a bull market that started in the spring of 2020 after prices crashed.

Smead said, "You have this huge move, you go from $20 a barrel to $120 a barrel, and then you pull back. 

Now people are saying, 'Oh yeah, that's it, that's going to fix inflation right there.'"

He said that there are several signs that prices will go up, though.

He said that the U.S. needs to make up for the 180 million barrels that were taken from strategic reserves to meet demand, and that supply is still tight.

"What happens when China's economy is fully open...when they get rid of their quarantines and just let everyone out?" he asked, implying that demand will go back up.

This year, covid flare-ups in China have led to lockdowns and a drop in energy use in the country with the most people.

Demand will likely to spring back when more movement restrictions are eased.

"The oil stocks here are good. "You can buy them here, and Warren Buffett does," Smead said.

Brent crude futures and U.S. West Texas Intermediate futures both went above $120 per barrel this year, but they are now at $96.88 and $90.88 per barrel, respectively. Still, both of them are more than 40% higher than they were a year ago.