Oil prices have fallen more than 10% this year. That's a surprise, given the strength in demand and the weakness in supplies. Those fundamental factors lead many oil market experts to believe oil prices will eventually rebound. 

One of those oil market bulls is EOG Resources (EOG 0.25%) COO Lloyd Helms. He recently told attendees at an industry conference that higher oil prices seem inevitable. Here's a look at what's fueling that view and three oil stocks to buy to potentially profit from that thesis. 

The bull case for crude prices

"We're a short term away from seeing the market tighten even further," stated EOG Resources COO Lloyd Helms at the JPMorgan energy conference. Because of that, "We are more constructive on where oil prices could go." It seems almost inevitable that oil prices will rise, barring a steep economic decline impacting demand. 

A few factors fuel that view. Led by Saudi Arabia, OPEC+ will cut its output by another 1 million barrels per day starting next month, further limiting supplies into 2024. Meanwhile, U.S. oil drillers, like EOG, remain conservative in drilling more wells.

While U.S. oil output is on track to grow by 6.1% this year, according to estimates by the U.S. Energy Information Administration, production will only increase by 1.3% in 2024. In addition, several leading global oil producing regions have experienced supply outages this year due to a range of issues.

These supply constraints are coming at a time when demand is strong and growing. In its May oil market report, the International Energy Agency (IEA) increased its annual consumption forecast. It expects demand to rise by 2.2 million barrels per day (BPD) this year, up 200,000 BPD from its April outlook, fueled by robust Chinese demand.

This sets the stage for a growing shortfall between supply and demand later this year. The IEA estimates that demand will outpace supply by nearly 2 million BPD during the second half.

Cashing in on higher crude prices

Higher oil prices would enable producers to generate more cash. Many are returning their oil-fueled windfalls to investors. That includes EOG Resources.

The oil company has committed to returning at least 60% of its free cash flow to shareholders each year. It has already committed to sending them $2.8 billion through a combination of its regular dividend, special dividends, and share repurchases.

As oil prices and its oil-fueled cash flows rise, EOG Resources will return more cash to shareholders. That growing cash flow and capital returns should give the oil stock the fuel to produce strong total returns for shareholders.

Devon Energy (DVN 0.19%) is another oil company committed to returning cash to shareholders. The company launched the industry's first fixed-plus-variable dividend framework a few years ago. It has committed to returning up to 50% of its post-base-dividend free cash flow to shareholders via variable dividends.

Devon will also repurchase shares with a portion of its remaining free cash. While Devon's total dividend outlay has fallen along with crude prices in recent quarters, it would rise as oil prices rally. That makes Devon a great way to quickly cash in on a rally in oil prices.

Pioneer Natural Resources (PXD -2.28%) followed Devon Energy's footsteps by launching a similar fixed-plus-variable dividend strategy. It initially committed to paying 75% of its free cash flow to shareholders via dividends.

However, it has tweaked its strategy this year to give it more flexibility. It now aims to return at least 75% of its free cash flow to shareholders via dividends and share repurchases, allowing it to buy back more stock opportunistically.

That strategy has enabled the company to capitalize on its lower share price this year to repurchase more stock. Meanwhile, higher oil prices could enable Pioneer to reopen the floodgates by paying higher variable dividends in the coming quarters.

Buy the dip before oil prices rally

Production cuts by OPEC will widen the gap between sluggish supplies and surging demand later this year. That should drive up oil prices, enabling oil companies to produce more cash.

Several oil companies, including EOG Resources, Devon Energy, and Pioneer Natural Resources, plan to return the bulk of any oil-fueled windfall to shareholders. That makes them great oil stocks to buy right now since those higher capital returns should give them the fuel to produce strong total returns when oil prices rally.