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 Ian Wyatt NEW YORK ( TheStreet) -- Most investors won't connect the dots between unrest in Libya and higher natural gas prices in Europe. But those that do are likely to profit from their specialized knowledge. You see, Libya produces around 2% of the world's oil. That's not an insignificant amount, and the supply disruption is spurring headline after headline of "Welcome back $100 a Barrel Oil" knock-offs. What's not garnering as much attention in the media, however, is that Libya's natural gas exports have increased significantly in the past few years -- especially for natural gas thirsty Europe. The U.S. Energy Information Administration (EIA) has data showing that since the Greenstream pipeline from Libya to Europe opened in late 2004, Libya's natural gas exports to Italy have doubled.
In the United States, the most recent energy boom has been in shale gas fields. These include the Barnett, the Fayetteville field in Arkansas, and the Haynesville field at the intersection of Arkansas, Louisiana and Texas. But the natural gas market has not matured in Europe where natural gas commands a huge premium -- current prices are more than double the price of natural gas in the United States. As I mentioned, this is because many European countries are at the mercy of Russia, and the state controlled firm Gazprom, for their gas supplies. This single company accounted for 84% of Russia's gas production in 2009. Because of Gazprom's dominance in the natural gas market, Europe's price is largely dependent on Russian border prices. Natural gas is not easily transported, so these countries can't simply import supplies from the U.S. to ease the pain. I strongly suggest you look into natural gas stocks that are poised to benefit from the likelihood that natural gas prices in Europe will continue to rise. In particular look at those that are exploring for natural gas. A couple companies that I've mentioned before include BNK Petroleum (BKX.TO) and Toreador Resources Corporation ( TRGL. For even higher potential gains, I'd
suggest micro-cap exploration companies like those featured in this report.