(Related video) Europe for natural gas supply opens opportunities for Latin America 3:46
(CNN Business) ––
Natural gas futures rose Monday to levels not seen since 2008, as the Northeast braces for a rare heavy snow storm in the middle of April.
The threat of the storm will force millions of families to turn up the heat in the coming days.
Which, in turn, will increase demand for natural gas, the most popular way to heat homes in the United States.
As natural gas prices soar, people are considering alternatives to heating their homes.
This is what you should know
Natural gas futures soared 9% to $7.96 per million British thermal units (BTUs) in recent trading.
This is the highest level since September 2008 and comes just after natural gas surged 16% last week.
The gains leave natural gas up an impressive 113% since the end of last year.
Now, the recent increase in this product will add to inflationary pressures in the United States, which faces a 40-year high in home prices.
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This spike in natural gas levels reflects the expectation of higher demand, due to unusually low temperatures and below-average inventories in the United States.
"It's been mostly cold and miserable," said Robert Yawger, vice president of energy futures at Mizuho Securities.
And there's another factor: High coal prices mean power plants may not be willing to move away from natural gas as a backup plan.
"That traditional relief valve of switching to coal is less likely," said Rob Thummel, senior portfolio manager at TortoiseEcofin.
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On the other hand, the war in Ukraine does not seem to be a central factor in the natural gas supply and demand situation.
Although it may be encouraging investors to bet on natural gas.
The United States has maxed out the amount of liquefied natural gas (LNG) it can send to Europe as it tries to move away from energy from Russia.
Families are already paying more money for energy.
Gas utility prices soared 21.6% in March from a year earlier, according to the Bureau of Labor Statistics.
The good news is that some analysts believe this natural gas spike will be relatively short-lived.
"This market could come crashing down real quick. It's overbought. You have to wonder who's left to buy it," Yawger said.
In that sense, he pointed out that natural gas was the financial asset with the best performance on Wall Street last week.
Thummel, Tortoise's portfolio manager, hopes high prices will incentivize more supply in the US, noting that consumers abroad are paying much higher prices.
"They're not going to stay this high forever," Thummel said.
"Do we think $7 is high? Europe and Asia are paying $35 for the same product."
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