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American Morning
Minding Your Business: Is U.S. Running Low on Oil, Gas?
Aired February 20, 2003 - 07:47 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.
PAULA ZAHN, CNN ANCHOR: Do you have any complaints about gas prices? Well, I do, and we're going to try to check out why gas prices are going up all over the country. And Andy Serwer is the man to answer the question.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Paula. Let's talk about the market a little bit quickly.
Yesterday, we had a bit of a retreat on Wall Street, down about 40 points on the Dow. Good news. Look at that.
(CROSSTALK)
ZAHN: A rally. When it goes up 40, you call it a rally...
SERWER: That's a bit of a retreat.
ZAHN: ... and down 40 is a retreat.
SERWER: A bit of a retreat.
ZAHN: OK.
SERWER: But see, we're above 8000 still. That's the good news.
The president is going to be talking about the economy today, Paula, in Georgia, again trying to beat the drum that things are getting better a little bit.
But let's talk about oil and gas. The big headline this morning, Paula, is the price of gasoline, regular unleaded a gallon out on the West Coast has topped $2...
ZAHN: Wow!
SERWER: ... which is always, you know, just psychologically when you see that $2 thing, it's a big problem.
Underlying that, of course, is the price of crude oil. The OPEC barrel up, the price now has gone from $25 to $37. That's near a two- year high.
Here are some of the bullet points. You can see that $37 we're at. Critical though, U.S. inventory is at a 27-year low. That's surprising. A lot of that has to do with Venezuela. The disruptions there continue, and it's really starting to eat into our inventories.
Nationwide, by the way, the price is $1.66 a gallon. You know, it varies tremendously. But...
ZAHN: But the concern is always that by the summer time...
SERWER: Yes, that's exactly right.
ZAHN: ... that the rest of the country might see those kind of prices.
SERWER: Exactly.
ZAHN: Do you see that happening?
SERWER: I really do, you know, especially because the situation in Venezuela is such a slow burn. Of course, Iraq is a wildcard. We really don't know. But it's hard to believe that we'd get a rapid step-up in production there no matter what happens on the war front.
I remember less than 18 months ago paying 99 cents a gallon down in Georgia. So, you know, when you go from $1 to $2 in less than a year-and-a-half, that's a truly huge spike. It definitely hurts the economy. The price of oil is 40 percent of the cost of gasoline, so that's obviously a big thing.
And I was up in Connecticut last week, and I paid nearly $2 a gallon up there. So, you can see it's really all over the country.
ZAHN: And if there is a war, what's the expectation of what that would do to oil prices?
SERWER: Well...
ZAHN: I know everybody has a different theory obviously.
SERWER: Well, I really think that we'll drop a little bit, but not as much as people suspect, because of the problems in Venezuela. Everyone keeps ignoring Venezuela, but Venezuela is a huge exporter to the United States. So, that's No. 1. And No. 2, no matter what happens, they won't be able to get those wells going great guns for at least a couple of months.
ZAHN: Andy Serwer, thanks so much.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Aired February 20, 2003 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Do you have any complaints about gas prices? Well, I do, and we're going to try to check out why gas prices are going up all over the country. And Andy Serwer is the man to answer the question.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Paula. Let's talk about the market a little bit quickly.
Yesterday, we had a bit of a retreat on Wall Street, down about 40 points on the Dow. Good news. Look at that.
(CROSSTALK)
ZAHN: A rally. When it goes up 40, you call it a rally...
SERWER: That's a bit of a retreat.
ZAHN: ... and down 40 is a retreat.
SERWER: A bit of a retreat.
ZAHN: OK.
SERWER: But see, we're above 8000 still. That's the good news.
The president is going to be talking about the economy today, Paula, in Georgia, again trying to beat the drum that things are getting better a little bit.
But let's talk about oil and gas. The big headline this morning, Paula, is the price of gasoline, regular unleaded a gallon out on the West Coast has topped $2...
ZAHN: Wow!
SERWER: ... which is always, you know, just psychologically when you see that $2 thing, it's a big problem.
Underlying that, of course, is the price of crude oil. The OPEC barrel up, the price now has gone from $25 to $37. That's near a two- year high.
Here are some of the bullet points. You can see that $37 we're at. Critical though, U.S. inventory is at a 27-year low. That's surprising. A lot of that has to do with Venezuela. The disruptions there continue, and it's really starting to eat into our inventories.
Nationwide, by the way, the price is $1.66 a gallon. You know, it varies tremendously. But...
ZAHN: But the concern is always that by the summer time...
SERWER: Yes, that's exactly right.
ZAHN: ... that the rest of the country might see those kind of prices.
SERWER: Exactly.
ZAHN: Do you see that happening?
SERWER: I really do, you know, especially because the situation in Venezuela is such a slow burn. Of course, Iraq is a wildcard. We really don't know. But it's hard to believe that we'd get a rapid step-up in production there no matter what happens on the war front.
I remember less than 18 months ago paying 99 cents a gallon down in Georgia. So, you know, when you go from $1 to $2 in less than a year-and-a-half, that's a truly huge spike. It definitely hurts the economy. The price of oil is 40 percent of the cost of gasoline, so that's obviously a big thing.
And I was up in Connecticut last week, and I paid nearly $2 a gallon up there. So, you can see it's really all over the country.
ZAHN: And if there is a war, what's the expectation of what that would do to oil prices?
SERWER: Well...
ZAHN: I know everybody has a different theory obviously.
SERWER: Well, I really think that we'll drop a little bit, but not as much as people suspect, because of the problems in Venezuela. Everyone keeps ignoring Venezuela, but Venezuela is a huge exporter to the United States. So, that's No. 1. And No. 2, no matter what happens, they won't be able to get those wells going great guns for at least a couple of months.
ZAHN: Andy Serwer, thanks so much.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
