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CNN Live At Daybreak

Sentences Handed Down for Terrorists Behind Attack on USS Cole; What Arab World is Saying About U.S. Candidates

Aired September 29, 2004 - 06:00   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.


CAROL COSTELLO, CNN ANCHOR: Sentences are handed down for the terrorists behind the attack on the USS Cole.
It is Wednesday, September 29.

This is DAYBREAK.

And good morning to you.

From the CNN Global Headquarters in Atlanta, I'm Carol Costello.

Now in the news, just hours ago, a judge in Yemen sentenced two men to death in the bombing of the USS Cole. One of them is the alleged mastermind. Four other men will serve prison time for the attack, which killed seventeen U.S. sailors four years ago. We'll have a live report for you in just a minute.

Take a look at this. Dramatic pictures of a daring bid for asylum this morning by more than 40 North Korean refugees. They scaled the fence around the Canadian embassy in Beijing. All but one made it into the compound.

Both presidential candidates will be in Florida today. President Bush plans to tour areas damaged by hurricane Jeanne. Senator Kerry is also coming to Florida, one day ahead of tomorrow's debate in Miami.

We'll have more on the candidates and the rules of the debate coming up later on DAYBREAK.

Things have been shaking in central California, as this footage from a store camera shows. It was a magnitude six earthquake and it was followed by more than 160 aftershocks. Nobody hurt.

To the forecast center now and Chad -- good morning and welcome back.

CHAD MYERS, CNN METEOROLOGIST: Thank you.

Nice to be back, Carol.

Mount St. Helens also shaking this morning, as well. And we all know what happened there 20 years ago when that thing shook last time. So we'll have to keep watching that. A lot of this shaking actually has to do with the fact that it is a full moon. There is more shaking when there's a full moon and a new moon. I know it's -- a lot of folks will debate that, but you can just go back and look at some of the biggest hurricanes -- at some of the biggest earthquakes and you'll see that they actually happen when the moon the sun are actually pulling like, just like they do, obviously, in a full moon or a new moon. They're pulling harder at that time.

(WEATHER REPORT)

COSTELLO: We want to get more now on the news breaking overnight. The death sentence handed down for two men in the bombing of the USS Cole in Yemen.

Our Caroline Faraj is in the region in Dubai in the United Arab Emirates.

Tell us what went down -- Caroline.

CAROLINE FARAJ, CNN CORRESPONDENT: Well, Carol, a Yemeni court sentenced today two men to death for their roles in the bombing of the USS Cole that took place in 2000, in the year 2000, and caused the killing of 17 U.S. sailors and wounding 39 sailors. The court also sentenced four others involved in the plot to prison terms ranging from five to 10 years.

As you know, Carol, that's the Saudi born al-Rahim al-Nashiri, who is believed to be the mastermind behind the Yemeni attack -- I mean the USS Cole attack. He was basically sent through the United Arab Emirates, who captured him in the UAE and then sent him to the U.S. and he is right now in the U.S. custody. And there was another Yemeni person who was also accused and he is also sentenced to death -- Carol.

COSTELLO: This mastermind, this al-Nashiri, who is in U.S. custody, can you tell us more about him?

FARAJ: He is a Saudi -- Saudi born and he has been living in Yemen for several years. It is believed that he is the mastermind and that he was basically very -- in very good contact to al Qaeda and especially with the head of al Qaeda, Osama bin Laden. Also, some reports are basically saying that he was -- he'd gotten his own training in Afghanistan and in several other places like Sudan and other places. But he was well trained. Also, we know that he was doing and basically he managed to mastermind, according to the Yemenese, the whole plot and the whole attack -- Carol.

COSTELLO: Yes, and he was very close to Osama bin Laden, so hopefully U.S. forces are getting some information out of him.

As far as the relationship between the United States and Yemen, tell us more about that.

FARAJ: Well, the Nashiri case being right now in the U.S. custody and the Yemenis are saying that it is our case, it is the -- the attacks took place on our soil and our country so we should basically implement the death sentence and he should come back to Yemen. So this is something that still the Yemenese are discussing with the Americans in order to make sure that he will be sent back to Yemen. But there is still this question. This question is not answered clearly and even the Yemenese, they are not able to give us any clear answer whether they managed to reach a final decision with the Americans regarding this case -- Carol.

COSTELLO: Caroline Faraj reporting live from Dubai this morning.

Thank you.

We're also going to take a closer look at your bottom line this morning. This summer, the price of crude oil was blamed for driving up gas prices. Now as it gets colder, you're likely to feel the pinch again, trying to stay warm. Light crude oil will open trading this morning at $49.90, just off the record $50 a barrel hit this week. And oil is trading in Europe right now at $49.69. So oil is the hot commodity right now.

But let's take a closer look at what's really heating up those prices. Winter demand always drives up the cost of home heating oil. But this season, higher prices may be driven more by cold fear.

CNN's Chris Huntington gets to the bottom of the crude oil barrel.

(BEGIN VIDEO TAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): If you heat your home with oil, get ready to turn down the thermostat, put on the sweater and open your wallet. It's likely to cost you a lot more this winter than last.

Wholesale heating oil is trading at an all time high, up nearly 80 percent in the last 12 months.

MICHAEL PROSCIA, OWNER, BLUE DIAMOND FUEL: And we've been eating it all summer long, all summer.

HUNTINGTON: Michael Proscia runs Blue Diamond Fuel in Brooklyn, New York, and he says so far, he has not passed on the full increase to his customers.

PROSCIA: Out of a $0.50 increase over the last couple of months, we've absorbed many $0.25, $0.30 of it.

HUNTINGTON: But what really upsets Proscia is that he sees no fundamental reason for heating oil to be so expensive.

PROSCIA: There's plenty of oil in the marketplace. There's plenty of oil now. There always has been plenty of oil. Supplies are abundant.

HUNTINGTON: Many other oil market veterans agree.

FADEL GHEIT, OPPENHEIMER: We contacted 32 oil companies. Not one oil company said that there was any supply structural shortages anywhere around the world -- not gasoline, not natural gas, not crude oil.

HUNTINGTON: Gheit insists that the run-up in petroleum prices has been driven largely by hedge funds and other investors making speculative bets in what is currently the hottest financial market.

GHEIT: Oil is the only game in town. There is, there are, the only thing that is moving right now, the stocks are not going anywhere.

HUNTINGTON: Real events such as rebel threats and Nigeria, the war in Iraq and hurricanes in the Gulf of Mexico conjure up concerns of oil supply interruption. But according to the Department of Energy, there is no evidence of significant nor sustained shortages. For now, that's little comfort to Mike Proscia and his customers.

Regarding the role of speculators, the New York Mercantile Exchange tells CNNfn that hedge funds have become much more active trading in the oil markets in the past year. But the NYMEX also points out that overall volume has increased dramatically.

Chris Huntington, CNN Financial News, Brooklyn, New York.

(END VIDEO TAPE)

COSTELLO: Of course, some say Murphy's Law is at work when it comes to oil prices. If something can go wrong, it will.

So let's head live to the Nasdaq market site and Carrie Lee -- good morning, Carrie.

CARRIE LEE, CNN CORRESPONDENT: Hi, Carol.

COSTELLO: You know, it's really a convergence of events and fear that's driving the cost of oil up, isn't it?

LEE: Well, fear is certainly part of the equation, Carol. But a lot of these issues surrounding high oil prices are very real. Inventory levels close to a 29-year low. As Chris Huntington was explaining, internal strife in Nigeria, which is the world's seventh largest oil producer, is causing some supply concerns. Of course, we have the Iraq situation going on for quite some time. And then there's a sharp rise in global demand, as well. So put all of these things together and we have crude oil rising, hitting above $50 yesterday. And that has been the big focus for investors as well as consumers -- Carol.

COSTELLO: So I keep asking you this question, could it go higher?

LEE: Well, Morgan Stanley seems to think so, recently saying oil could hit $60 a barrel here. Of course, that's just one opinion. Others say that fears are overblown and that prices could subside a little bit. What we do know, though, is that the winter heating season is coming up and if crude oil prices are higher, that means people's home heating bills are going to be higher. In fact, one estimate, $200 to $500 more this winter. That's what people are going to pay if they burn about 1,000 gallons during the season. We'll get some numbers from the Natural Gas Supply Association on Thursday and that'll give maybe people a clearer estimate of what they can expect this time.

COSTELLO: See, I can remember way back to Jimmy Carter, when we had to conserve and there were long lines at gas stations. We're not anywhere near that point, are we?

LEE: We're not near that point. In fact, gasoline a few months ago was actually coming down as oil was coming up. Now, of course, last week that wasn't the case. We came up to $1.91 a gallon. Keep in mind, though, that when you compare oil prices today with, say, 1981, when the Iranian revolution was going on, when you adjust this for inflation, oil prices still about $30 a barrel below those levels. So that could lend some weight to the argument that fears are overblown. But still, $50 a barrel pretty high and expect higher home heating bills, too.

COSTELLO: All right, Carrie Lee live from the NASDAQ market site.

Thank you.

In News Across America this morning, police in Detroit are searching for a suspect in the shooting death of a 3-year-old child. The child was killed when a man fired several shots into an in-home daycare center. Two adults are in critical condition after being shot. An infant also in critical condition after being dropped during the attack.

A nurse whose job was ending at a Philadelphia nursing home is under arrest in Georgia. Last week, we told you that six patients at that nursing home had their feeding tubes cut. Fortunately, no patient was harmed. The former nurse will be transported back to Pennsylvania to face charges of assault and reckless endangerment.

We've all been watching Mount St. Helens this week and now scientists say an explosion is imminent. They say a small eruption of rocks and ash could come as early as next week. More than 1,000 small earthquakes have been felt beneath the volcano the past few days. An eruption could send two to three foot wide rocks flying out of the mountain.

And, by the way, Aaron Brown continues his trek across America tonight. "NEWSNIGHT" comes to you live from San Francisco. Among the items of interest will be a look at the Bay Area's legacy of earthquakes. So be sure to tune in at 10:00 p.m. Eastern tonight.

How the race for the White House is seen at home and abroad. Coming up, what's the Arab community have to say about the presidential race in the United States? Do Arabs care who wins?

And one of the candidates gets some pointers from a guy who knows what it'll feel like to be in John Kerry's shoes tomorrow night.

And cutting through the clutter on carbs -- can you still enjoy your favorite frosty beverages and even a glass of wine if you're keeping a close eye on nutrition labels and on carbs?

But first, here's a look at what else is making news this Wednesday morning.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

COSTELLO: Your news, money, weather and sports.

It is 6:14 Eastern.

Here's what's all new this morning.

Two men have been sentenced to death in the bombing of the USS Cole. A judge in Yemen gave four others prison time. Seventeen American sailors were killed in the suicide attack, which has been blamed on al Qaeda.

A happy homecoming for two Italian women who had been taken hostage in Iraq. Their release comes less than a week after an Islamic Web site claimed they'd been killed. The two humanitarian aid workers were abducted on September 7.

In money, you, yes, you are worth more money today. At least that's what the Commerce Department says. Personal wealth rose by 1 1/2 percent across the country during the second quarter of this year. It's the fastest pace in more than three years.

In culture, the Cartwrights are looking for a new home. That's because the Ponderosa is now closed. The ranch where the TV show "Bonanza" was filmed closed down Sunday after being sold to developers. It's not known what the buyers are going to do with the Ponderosa.

In sports, the Montreal Expos are moving to the nation's capital. Finally, Washington, D.C. gets a team. The Associated Press reports that major league baseball could announce the move as early as today. Washington last had a team in 1971, but then it moved to Texas -- Chad.

MYERS: And good morning, Carol.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you this morning.

With the presidential debate right around the corner now, and since fear of change in a time of war has become a hot issue, we wanted to hear what the Arab world is saying about the U.S. candidates.

Our senior editor of Arab affairs, Octavia Nasr, is here to enlighten us -- good morning.

OCTAVIA NASR, CNN CORRESPONDENT: Good morning, Carol.

COSTELLO: So does the Arab world really care who wins, President Bush or Senator Kerry?

NASR: Not really. If you watch Arab media or read Arab media, it seems like they think they're the same as far as the Arab issues are concerned, or Muslim issues are concerned. They don't see much difference. They think they're just as bad, if you will. They don't see them as being able to change anything to the positive.

Now, of course, the Arab media and the Arab world, I mean, you have the mainstream and then you have the extreme. And you hear in this debate, you know, you hear in this election year, you hear the rhetoric, the terrorists want Kerry or the terrorists prefer Bush. And I find that to be very simpleton because, you know, all you need to do is just get on those Islamist Web sites where the terrorists go on and post messages and make announcements and so forth.

Again, they think they're just as bad, but it seems like...

COSTELLO: Well, what specifically are the terrorists saying on the Web site? I mean do they want to see President Bush stay in office? Do they want to see John Kerry come into office? Does it make a difference to -- although who the heck knows what the terrorists are thinking?

NASR: That's exactly what I'm saying. All you need to do is just get on those Web sites to know what they're thinking, or at least what they could be thinking. And it seems that they hate them both equally. They cannot stand either of them. They just, I mean these are extreme people. They cannot stand the American culture. They cannot stand the American people and they wish them ill.

Now, there is one thing that you do see on Islamist Web sites, and that is they're all boasting about how they've been thriving since the war in Iraq last year. So they do think that under President Bush they've done a lot better than before. They think that...

COSTELLO: As far as having a place in which to operate?

NASR: As far as having a safe haven, if you will. They see Iraq as a safe haven. They can operate there any way they like. They've been kidnapping people right and left, beheading whoever they want to behead, releasing the ones that they want to release. So they see this as a big victory to them and they credit that to the openness that Iraq went through since the war last year.

COSTELLO: And besides that, I would suppose they're happy that they're getting all of this attention, too, as far as being on television in all parts of the world.

NASR: Oh, absolutely. I mean you see those congratulatory notes about -- congratulations, your Web site made it to international media. And congratulations and more power to you and so forth. So it's really, it's pretty scary when you look at these Islamist Web sites. You just have to keep your nerves in control, because it is a bit upsetting. It is extreme.

Again, I mean this is not mainstream, this is the extremists, the terrorists, the ones that wish Americans ill.

You go to the mainstream, and it's a different story. Now, the mainstream media, Arab media, the way they portray the election is that President Bush hasn't done well as far as the Arab world is concerned. They are very concerned about what's going on in Iraq. Pessimism is rampant right now on Arab media. They see Iraq as a situation that has no end in sight. And for that they're very concerned and they blame President Bush for that.

COSTELLO: Octavia Nasr, thank you so much for joining DAYBREAK this morning.

Still to come on DAYBREAK, four years after it began, both sides of the Mideast crisis are still feeling the effects of the intifada. We'll take a look at how life has changed and how it hasn't.

Plus, a CNN producer abducted at gunpoint, he is now out of harm's way. He's with his family this morning. We'll hear what he has to say about his harrowing experience.

We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: More than 4,300 people dead, that is the toll from the Palestinian uprising against Israel. It started four years ago this week. Palestinians are marking the anniversary with marches. Some marchers worse suicide bomb belts. The uprising erupted when Ariel Sharon visited a disputed shrine in Jerusalem. Back then, he was an Israeli opposition leader. Now, of course, he is the prime minister.

So four violent years. How have they shaped the lives of Israelis and Palestinians?

For a closer look, let's head live to Jerusalem and CNN's Guy Raz -- good morning, Guy.

GUY RAZ, CNN CORRESPONDENT: Good morning, Carol.

Four years of brutal exchanges have seen elements of moral and political compromise by both sides. For Israelis and Palestinians who once believed peace was attainable, this anniversary is something neither side will be celebrating.

(BEGIN VIDEO TAPE)

RAZ (voice-over): Empty streets, the absence of city life, suicide bombings taking a physical and psychological toll on Israelis. But that was then. This is now.

UNIDENTIFIED MALE: I think there is a feeling that perhaps the worst is over. Life is back to the streets. It's back to the cafes. It's back to the shopping malls.

RAZ: Even at Jerusalem's Cafe Hillel. A year ago, a suicide bomber tore this place apart.

Moran Tubor's (ph) father was killed at Cafe Hillel. A year on, she started going out again. Her favorite club, Pahoman (ph), once deserted, is now packed.

MORAN TUBOR: The atmosphere is different.

(THROUGH TRANSLATOR): The last few months have been good. There were no major attacks.

RAZ (on camera): Israelis believe it's because of this -- the wall that separates them from Palestinians. Now, the government here points out that this barrier has reduced attacks inside Israel by some 90 percent. But at what price?

(voice-over): International protests and court rulings condemning the wall have left Israel more isolated diplomatically and incursions into the occupied territories and Palestinian civilian casualties haven't improved Israel's global image, either. But political analyst Ari Sheveet (ph) believes international pressure has brought about an unintended result, as well.

ARI SHEVEET: The political conclusion of the Israeli majority is let's give up as much of occupation as possible.

RAZ: An unlikely advocate of this view is hard-line leader Ariel Sharon. By next year, Sharon hopes to evacuate Israeli soldiers and settlers from Gaza. Israelis believe his of the described ruthless crackdown on Palestinian militants has worked.

The beaches are full. Tourists are trickling back. Four years on, Israel believes it's recovering.

(END VIDEO TAPE)

RAZ: But, Carol, recovery doesn't necessarily mean a light at the end of the tunnel. Many Israelis will privately concede that military confrontation is only a stopgap and many Palestinians will say that the violence has undermined their struggle for self- determination -- Carol.

COSTELLO: Guy Raz reporting live from Jerusalem this morning.

Thank you.

Well, he's used to being on the other side of the camera. But this time CNN producer Riad Ali was swarmed by reporters shortly after gunmen in the Gaza Strip freed him. They abducted him almost 24 hours before. Ali didn't talk much about his captivity.

(BEGIN VIDEO CLIP)

RIAD ALI, CNN PRODUCER: All I would like to say is to thank all of those people who were involved in my release. I would like to thank President Arafat, the Palestinian prime minister; many Israeli Arab figures; and, of course, CNN. CNN had made a lot of efforts to ensure my release. I would like to thank all of these people.

The only thing that I am awaiting for now is to see my family, to see my kids, to see my wife. They are waiting for me up in the north in my village. So thanks to all of you.

(END VIDEO CLIP)

COSTELLO: Ali was shown on a videotape made by his captors saying he'd been taken by a group linked to Yasser Arafat's Fatah movement. But after being freed, Ali said he didn't know who took him.

Still to come on DAYBREAK, he's been there. Now Al Gore has some advice for John Kerry on the eve of the senator's first presidential debate.

And campaigning runs in their family. And one of the Bush twins shares a behind-the-scenes anecdote.

That and more when we get to this morning's political hot topics. That's coming your way next.

(COMMERCIAL BREAK)

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Aired September 29, 2004 - 06:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Sentences are handed down for the terrorists behind the attack on the USS Cole.
It is Wednesday, September 29.

This is DAYBREAK.

And good morning to you.

From the CNN Global Headquarters in Atlanta, I'm Carol Costello.

Now in the news, just hours ago, a judge in Yemen sentenced two men to death in the bombing of the USS Cole. One of them is the alleged mastermind. Four other men will serve prison time for the attack, which killed seventeen U.S. sailors four years ago. We'll have a live report for you in just a minute.

Take a look at this. Dramatic pictures of a daring bid for asylum this morning by more than 40 North Korean refugees. They scaled the fence around the Canadian embassy in Beijing. All but one made it into the compound.

Both presidential candidates will be in Florida today. President Bush plans to tour areas damaged by hurricane Jeanne. Senator Kerry is also coming to Florida, one day ahead of tomorrow's debate in Miami.

We'll have more on the candidates and the rules of the debate coming up later on DAYBREAK.

Things have been shaking in central California, as this footage from a store camera shows. It was a magnitude six earthquake and it was followed by more than 160 aftershocks. Nobody hurt.

To the forecast center now and Chad -- good morning and welcome back.

CHAD MYERS, CNN METEOROLOGIST: Thank you.

Nice to be back, Carol.

Mount St. Helens also shaking this morning, as well. And we all know what happened there 20 years ago when that thing shook last time. So we'll have to keep watching that. A lot of this shaking actually has to do with the fact that it is a full moon. There is more shaking when there's a full moon and a new moon. I know it's -- a lot of folks will debate that, but you can just go back and look at some of the biggest hurricanes -- at some of the biggest earthquakes and you'll see that they actually happen when the moon the sun are actually pulling like, just like they do, obviously, in a full moon or a new moon. They're pulling harder at that time.

(WEATHER REPORT)

COSTELLO: We want to get more now on the news breaking overnight. The death sentence handed down for two men in the bombing of the USS Cole in Yemen.

Our Caroline Faraj is in the region in Dubai in the United Arab Emirates.

Tell us what went down -- Caroline.

CAROLINE FARAJ, CNN CORRESPONDENT: Well, Carol, a Yemeni court sentenced today two men to death for their roles in the bombing of the USS Cole that took place in 2000, in the year 2000, and caused the killing of 17 U.S. sailors and wounding 39 sailors. The court also sentenced four others involved in the plot to prison terms ranging from five to 10 years.

As you know, Carol, that's the Saudi born al-Rahim al-Nashiri, who is believed to be the mastermind behind the Yemeni attack -- I mean the USS Cole attack. He was basically sent through the United Arab Emirates, who captured him in the UAE and then sent him to the U.S. and he is right now in the U.S. custody. And there was another Yemeni person who was also accused and he is also sentenced to death -- Carol.

COSTELLO: This mastermind, this al-Nashiri, who is in U.S. custody, can you tell us more about him?

FARAJ: He is a Saudi -- Saudi born and he has been living in Yemen for several years. It is believed that he is the mastermind and that he was basically very -- in very good contact to al Qaeda and especially with the head of al Qaeda, Osama bin Laden. Also, some reports are basically saying that he was -- he'd gotten his own training in Afghanistan and in several other places like Sudan and other places. But he was well trained. Also, we know that he was doing and basically he managed to mastermind, according to the Yemenese, the whole plot and the whole attack -- Carol.

COSTELLO: Yes, and he was very close to Osama bin Laden, so hopefully U.S. forces are getting some information out of him.

As far as the relationship between the United States and Yemen, tell us more about that.

FARAJ: Well, the Nashiri case being right now in the U.S. custody and the Yemenis are saying that it is our case, it is the -- the attacks took place on our soil and our country so we should basically implement the death sentence and he should come back to Yemen. So this is something that still the Yemenese are discussing with the Americans in order to make sure that he will be sent back to Yemen. But there is still this question. This question is not answered clearly and even the Yemenese, they are not able to give us any clear answer whether they managed to reach a final decision with the Americans regarding this case -- Carol.

COSTELLO: Caroline Faraj reporting live from Dubai this morning.

Thank you.

We're also going to take a closer look at your bottom line this morning. This summer, the price of crude oil was blamed for driving up gas prices. Now as it gets colder, you're likely to feel the pinch again, trying to stay warm. Light crude oil will open trading this morning at $49.90, just off the record $50 a barrel hit this week. And oil is trading in Europe right now at $49.69. So oil is the hot commodity right now.

But let's take a closer look at what's really heating up those prices. Winter demand always drives up the cost of home heating oil. But this season, higher prices may be driven more by cold fear.

CNN's Chris Huntington gets to the bottom of the crude oil barrel.

(BEGIN VIDEO TAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): If you heat your home with oil, get ready to turn down the thermostat, put on the sweater and open your wallet. It's likely to cost you a lot more this winter than last.

Wholesale heating oil is trading at an all time high, up nearly 80 percent in the last 12 months.

MICHAEL PROSCIA, OWNER, BLUE DIAMOND FUEL: And we've been eating it all summer long, all summer.

HUNTINGTON: Michael Proscia runs Blue Diamond Fuel in Brooklyn, New York, and he says so far, he has not passed on the full increase to his customers.

PROSCIA: Out of a $0.50 increase over the last couple of months, we've absorbed many $0.25, $0.30 of it.

HUNTINGTON: But what really upsets Proscia is that he sees no fundamental reason for heating oil to be so expensive.

PROSCIA: There's plenty of oil in the marketplace. There's plenty of oil now. There always has been plenty of oil. Supplies are abundant.

HUNTINGTON: Many other oil market veterans agree.

FADEL GHEIT, OPPENHEIMER: We contacted 32 oil companies. Not one oil company said that there was any supply structural shortages anywhere around the world -- not gasoline, not natural gas, not crude oil.

HUNTINGTON: Gheit insists that the run-up in petroleum prices has been driven largely by hedge funds and other investors making speculative bets in what is currently the hottest financial market.

GHEIT: Oil is the only game in town. There is, there are, the only thing that is moving right now, the stocks are not going anywhere.

HUNTINGTON: Real events such as rebel threats and Nigeria, the war in Iraq and hurricanes in the Gulf of Mexico conjure up concerns of oil supply interruption. But according to the Department of Energy, there is no evidence of significant nor sustained shortages. For now, that's little comfort to Mike Proscia and his customers.

Regarding the role of speculators, the New York Mercantile Exchange tells CNNfn that hedge funds have become much more active trading in the oil markets in the past year. But the NYMEX also points out that overall volume has increased dramatically.

Chris Huntington, CNN Financial News, Brooklyn, New York.

(END VIDEO TAPE)

COSTELLO: Of course, some say Murphy's Law is at work when it comes to oil prices. If something can go wrong, it will.

So let's head live to the Nasdaq market site and Carrie Lee -- good morning, Carrie.

CARRIE LEE, CNN CORRESPONDENT: Hi, Carol.

COSTELLO: You know, it's really a convergence of events and fear that's driving the cost of oil up, isn't it?

LEE: Well, fear is certainly part of the equation, Carol. But a lot of these issues surrounding high oil prices are very real. Inventory levels close to a 29-year low. As Chris Huntington was explaining, internal strife in Nigeria, which is the world's seventh largest oil producer, is causing some supply concerns. Of course, we have the Iraq situation going on for quite some time. And then there's a sharp rise in global demand, as well. So put all of these things together and we have crude oil rising, hitting above $50 yesterday. And that has been the big focus for investors as well as consumers -- Carol.

COSTELLO: So I keep asking you this question, could it go higher?

LEE: Well, Morgan Stanley seems to think so, recently saying oil could hit $60 a barrel here. Of course, that's just one opinion. Others say that fears are overblown and that prices could subside a little bit. What we do know, though, is that the winter heating season is coming up and if crude oil prices are higher, that means people's home heating bills are going to be higher. In fact, one estimate, $200 to $500 more this winter. That's what people are going to pay if they burn about 1,000 gallons during the season. We'll get some numbers from the Natural Gas Supply Association on Thursday and that'll give maybe people a clearer estimate of what they can expect this time.

COSTELLO: See, I can remember way back to Jimmy Carter, when we had to conserve and there were long lines at gas stations. We're not anywhere near that point, are we?

LEE: We're not near that point. In fact, gasoline a few months ago was actually coming down as oil was coming up. Now, of course, last week that wasn't the case. We came up to $1.91 a gallon. Keep in mind, though, that when you compare oil prices today with, say, 1981, when the Iranian revolution was going on, when you adjust this for inflation, oil prices still about $30 a barrel below those levels. So that could lend some weight to the argument that fears are overblown. But still, $50 a barrel pretty high and expect higher home heating bills, too.

COSTELLO: All right, Carrie Lee live from the NASDAQ market site.

Thank you.

In News Across America this morning, police in Detroit are searching for a suspect in the shooting death of a 3-year-old child. The child was killed when a man fired several shots into an in-home daycare center. Two adults are in critical condition after being shot. An infant also in critical condition after being dropped during the attack.

A nurse whose job was ending at a Philadelphia nursing home is under arrest in Georgia. Last week, we told you that six patients at that nursing home had their feeding tubes cut. Fortunately, no patient was harmed. The former nurse will be transported back to Pennsylvania to face charges of assault and reckless endangerment.

We've all been watching Mount St. Helens this week and now scientists say an explosion is imminent. They say a small eruption of rocks and ash could come as early as next week. More than 1,000 small earthquakes have been felt beneath the volcano the past few days. An eruption could send two to three foot wide rocks flying out of the mountain.

And, by the way, Aaron Brown continues his trek across America tonight. "NEWSNIGHT" comes to you live from San Francisco. Among the items of interest will be a look at the Bay Area's legacy of earthquakes. So be sure to tune in at 10:00 p.m. Eastern tonight.

How the race for the White House is seen at home and abroad. Coming up, what's the Arab community have to say about the presidential race in the United States? Do Arabs care who wins?

And one of the candidates gets some pointers from a guy who knows what it'll feel like to be in John Kerry's shoes tomorrow night.

And cutting through the clutter on carbs -- can you still enjoy your favorite frosty beverages and even a glass of wine if you're keeping a close eye on nutrition labels and on carbs?

But first, here's a look at what else is making news this Wednesday morning.

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COSTELLO: Your news, money, weather and sports.

It is 6:14 Eastern.

Here's what's all new this morning.

Two men have been sentenced to death in the bombing of the USS Cole. A judge in Yemen gave four others prison time. Seventeen American sailors were killed in the suicide attack, which has been blamed on al Qaeda.

A happy homecoming for two Italian women who had been taken hostage in Iraq. Their release comes less than a week after an Islamic Web site claimed they'd been killed. The two humanitarian aid workers were abducted on September 7.

In money, you, yes, you are worth more money today. At least that's what the Commerce Department says. Personal wealth rose by 1 1/2 percent across the country during the second quarter of this year. It's the fastest pace in more than three years.

In culture, the Cartwrights are looking for a new home. That's because the Ponderosa is now closed. The ranch where the TV show "Bonanza" was filmed closed down Sunday after being sold to developers. It's not known what the buyers are going to do with the Ponderosa.

In sports, the Montreal Expos are moving to the nation's capital. Finally, Washington, D.C. gets a team. The Associated Press reports that major league baseball could announce the move as early as today. Washington last had a team in 1971, but then it moved to Texas -- Chad.

MYERS: And good morning, Carol.

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COSTELLO: Those are the latest headlines for you this morning.

With the presidential debate right around the corner now, and since fear of change in a time of war has become a hot issue, we wanted to hear what the Arab world is saying about the U.S. candidates.

Our senior editor of Arab affairs, Octavia Nasr, is here to enlighten us -- good morning.

OCTAVIA NASR, CNN CORRESPONDENT: Good morning, Carol.

COSTELLO: So does the Arab world really care who wins, President Bush or Senator Kerry?

NASR: Not really. If you watch Arab media or read Arab media, it seems like they think they're the same as far as the Arab issues are concerned, or Muslim issues are concerned. They don't see much difference. They think they're just as bad, if you will. They don't see them as being able to change anything to the positive.

Now, of course, the Arab media and the Arab world, I mean, you have the mainstream and then you have the extreme. And you hear in this debate, you know, you hear in this election year, you hear the rhetoric, the terrorists want Kerry or the terrorists prefer Bush. And I find that to be very simpleton because, you know, all you need to do is just get on those Islamist Web sites where the terrorists go on and post messages and make announcements and so forth.

Again, they think they're just as bad, but it seems like...

COSTELLO: Well, what specifically are the terrorists saying on the Web site? I mean do they want to see President Bush stay in office? Do they want to see John Kerry come into office? Does it make a difference to -- although who the heck knows what the terrorists are thinking?

NASR: That's exactly what I'm saying. All you need to do is just get on those Web sites to know what they're thinking, or at least what they could be thinking. And it seems that they hate them both equally. They cannot stand either of them. They just, I mean these are extreme people. They cannot stand the American culture. They cannot stand the American people and they wish them ill.

Now, there is one thing that you do see on Islamist Web sites, and that is they're all boasting about how they've been thriving since the war in Iraq last year. So they do think that under President Bush they've done a lot better than before. They think that...

COSTELLO: As far as having a place in which to operate?

NASR: As far as having a safe haven, if you will. They see Iraq as a safe haven. They can operate there any way they like. They've been kidnapping people right and left, beheading whoever they want to behead, releasing the ones that they want to release. So they see this as a big victory to them and they credit that to the openness that Iraq went through since the war last year.

COSTELLO: And besides that, I would suppose they're happy that they're getting all of this attention, too, as far as being on television in all parts of the world.

NASR: Oh, absolutely. I mean you see those congratulatory notes about -- congratulations, your Web site made it to international media. And congratulations and more power to you and so forth. So it's really, it's pretty scary when you look at these Islamist Web sites. You just have to keep your nerves in control, because it is a bit upsetting. It is extreme.

Again, I mean this is not mainstream, this is the extremists, the terrorists, the ones that wish Americans ill.

You go to the mainstream, and it's a different story. Now, the mainstream media, Arab media, the way they portray the election is that President Bush hasn't done well as far as the Arab world is concerned. They are very concerned about what's going on in Iraq. Pessimism is rampant right now on Arab media. They see Iraq as a situation that has no end in sight. And for that they're very concerned and they blame President Bush for that.

COSTELLO: Octavia Nasr, thank you so much for joining DAYBREAK this morning.

Still to come on DAYBREAK, four years after it began, both sides of the Mideast crisis are still feeling the effects of the intifada. We'll take a look at how life has changed and how it hasn't.

Plus, a CNN producer abducted at gunpoint, he is now out of harm's way. He's with his family this morning. We'll hear what he has to say about his harrowing experience.

We'll be right back.

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COSTELLO: More than 4,300 people dead, that is the toll from the Palestinian uprising against Israel. It started four years ago this week. Palestinians are marking the anniversary with marches. Some marchers worse suicide bomb belts. The uprising erupted when Ariel Sharon visited a disputed shrine in Jerusalem. Back then, he was an Israeli opposition leader. Now, of course, he is the prime minister.

So four violent years. How have they shaped the lives of Israelis and Palestinians?

For a closer look, let's head live to Jerusalem and CNN's Guy Raz -- good morning, Guy.

GUY RAZ, CNN CORRESPONDENT: Good morning, Carol.

Four years of brutal exchanges have seen elements of moral and political compromise by both sides. For Israelis and Palestinians who once believed peace was attainable, this anniversary is something neither side will be celebrating.

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RAZ (voice-over): Empty streets, the absence of city life, suicide bombings taking a physical and psychological toll on Israelis. But that was then. This is now.

UNIDENTIFIED MALE: I think there is a feeling that perhaps the worst is over. Life is back to the streets. It's back to the cafes. It's back to the shopping malls.

RAZ: Even at Jerusalem's Cafe Hillel. A year ago, a suicide bomber tore this place apart.

Moran Tubor's (ph) father was killed at Cafe Hillel. A year on, she started going out again. Her favorite club, Pahoman (ph), once deserted, is now packed.

MORAN TUBOR: The atmosphere is different.

(THROUGH TRANSLATOR): The last few months have been good. There were no major attacks.

RAZ (on camera): Israelis believe it's because of this -- the wall that separates them from Palestinians. Now, the government here points out that this barrier has reduced attacks inside Israel by some 90 percent. But at what price?

(voice-over): International protests and court rulings condemning the wall have left Israel more isolated diplomatically and incursions into the occupied territories and Palestinian civilian casualties haven't improved Israel's global image, either. But political analyst Ari Sheveet (ph) believes international pressure has brought about an unintended result, as well.

ARI SHEVEET: The political conclusion of the Israeli majority is let's give up as much of occupation as possible.

RAZ: An unlikely advocate of this view is hard-line leader Ariel Sharon. By next year, Sharon hopes to evacuate Israeli soldiers and settlers from Gaza. Israelis believe his of the described ruthless crackdown on Palestinian militants has worked.

The beaches are full. Tourists are trickling back. Four years on, Israel believes it's recovering.

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RAZ: But, Carol, recovery doesn't necessarily mean a light at the end of the tunnel. Many Israelis will privately concede that military confrontation is only a stopgap and many Palestinians will say that the violence has undermined their struggle for self- determination -- Carol.

COSTELLO: Guy Raz reporting live from Jerusalem this morning.

Thank you.

Well, he's used to being on the other side of the camera. But this time CNN producer Riad Ali was swarmed by reporters shortly after gunmen in the Gaza Strip freed him. They abducted him almost 24 hours before. Ali didn't talk much about his captivity.

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RIAD ALI, CNN PRODUCER: All I would like to say is to thank all of those people who were involved in my release. I would like to thank President Arafat, the Palestinian prime minister; many Israeli Arab figures; and, of course, CNN. CNN had made a lot of efforts to ensure my release. I would like to thank all of these people.

The only thing that I am awaiting for now is to see my family, to see my kids, to see my wife. They are waiting for me up in the north in my village. So thanks to all of you.

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COSTELLO: Ali was shown on a videotape made by his captors saying he'd been taken by a group linked to Yasser Arafat's Fatah movement. But after being freed, Ali said he didn't know who took him.

Still to come on DAYBREAK, he's been there. Now Al Gore has some advice for John Kerry on the eve of the senator's first presidential debate.

And campaigning runs in their family. And one of the Bush twins shares a behind-the-scenes anecdote.

That and more when we get to this morning's political hot topics. That's coming your way next.

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