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2 Stocks That Could Soar if Gas Reaches $4 a Gallon

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Dave Sterman

NEW YORK ( StreetAuthority) -- European finance ministers -- also known as "the gang that couldn't shoot straight" -- surprised investors by finally getting their act together, jointly cobbling a relief package for Greece that should remove any sort of doomsday risk from the market, at least for the next few quarters. A powerful relief rally took place in stock markets across the globe, as a sign of a welcome reaction.

Yet the good news also brings an unexpected problem. A stabilized Europe, coupled with a U.S. economy that is likely to dodge a recession, means oil prices are starting to perk back up. Crude oil, of the West Texas Intermediate (WTI) kind, shot up from $77 a barrel to $93 in October and, before long, expect to see gasoline prices quickly move back to the $4 mark.

Meanwhile, even as crude oil surges, natural-gas prices remain in a funk as U.S. output surges ever higher. The broadening price differential between crude oil and natural gas could be a boon for several companies, and as I mentioned a couple weeks ago, is bringing real attention to the exploration side of the business. But another group of companies is positioned to benefit if natural gas takes off as an energy source in the transportation sector.

We've already got evidence of how such a move would be greeted by investors. Westport Innovations (WPRT) has seen its stock nearly double since February as a rising number of truck fleet operators line up to use Westport's natural gas retrofit technology. Considering the high price of diesel fuel, a switch to natural gas makes ample sense. Reducing oil imports (from sometimes hostile trading partners) and boosting usage of U.S.-produced gas also holds appeal in terms of national security and persistent trade imbalances.

What about cars? Well, the same logic applies. On an apples-to-apples basis with gasoline, natural gas costs less than $2 per gallon. (It currently costs upwards of $5,000 more for a natural gas-powered car than a regular car, though that should drop as production volume rises.) Yet consumer awareness of the benefits remain fairly low and Congress -- which had been expected to be a big backer of natural-gas transportation subsidies -- no longer looks set to provide any help. Another concern: a shortage of natural-gas fueling stations. Luckily, a pair of companies is stepping into the breach to help catalyze the industry transition.

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