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CNN Live Today

Despite Rising Prices, Gas Cheaper Than Last Year

Aired April 09, 2002 - 12:23   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Peak driving season is just warming up, and already there are possible bumps in the road. First came a sudden spike in gasoline costs, and now Saddam Hussein has suspended sales of Iraqi oil.

CNN's Brooks Jackson talked to some leading energy experts to see what lies ahead.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice-over): Gasoline prices shooting up again and headed higher.

UNIDENTIFIED MALE: It's just a plain old ouch, because you know it's going to hit you every week.

JACKSON: But maybe not all that high. U.S. drivers actually are in better shape than last year. At $1.41 a gallon, the national average price of gasoline was still about $0.09 cheaper than a year ago. More increases are coming, summer's on the way. But the official forecast announced Monday is for summer prices to average $1.46, compared to last summer's $1.54. That's five percent less, even with motorists expected to drive more summer miles than ever.

Crude oil prices shot up Monday when Iraqi leader Saddam Hussein said he would suspend oil shipments to the U.S. But experts say that's more psychological than real.

DANIEL YERGIN, CAMBRIDGE ENERGY RESEARCH: the direct impact of an Iraqi embargo against the United States would be slight. But what it does do is contribute to this anxiety and nervousness that's already reflected in the oil price.

JACKSON: Of all the oil consumed in the U.S. last year, Iraq supplied less than four percent. And other exporters could easily fill that gap.

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: That could pretty easily be made up by -- certainly by Saudi Arabia, who has lost tremendous amount of market share over the last couple of decades, as they've sort of had to give in and been the price absorber in OPEC. Also, the Russians are out there ready to fight out a market share war with Saudi Arabia. They're willing to pick up their production. JACKSON: This time, Venezuela could be a bigger worry than the Arabs. Labor protests are squeezing off its oil exports. But other factors favor motorists. Refineries are putting out more gasoline and less jet fuel since September 11, and still have more unused capacity than last year for emergencies.

And the switch over to summer fuels, which last year contributed to big price spikes in the Midwest, should go more smoothly this time thanks to new rules from the EPA.

(on camera): A lot could go wrong: a pipeline break, a full scale war. But it will probably take a lot more than Saddam Hussein to send gasoline over $2 this summer.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE)

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