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What's Behind Rise in Gas Prices?
Aired August 22, 2003 - 13:17 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.
MILES O'BRIEN, CNN ANCHOR: Phoenix drivers arent the only ones feeling pain at the pump. Gas prices are up all across the country. So, how high will they go, you might ask? And what's behind this spike?
Let's go to our Jen Rogers, who has some answers. She's outside a gas station in Burbank, California.
Hello -- Jen.
JEN ROGERS, CNN FINANCIAL NEWS: Hi there, Miles.
Well, after some relative stability in 2002, it has been a real rollercoaster ride for gas prices in 2003.
We were just talking to this man. He's filling up his tank here. He has just hit over $70 -- just about $73. Hitting -- we hit record highs here in March. The people in California are not too surprised with what's happening with gas prices. But, you know, they cooled off, and now they're really on fire again. People asking: What is going on?
According to the government, the West Coast saw a 17 cent jump per gallon last week, and that was the second biggest weekly jump they've seen since they started keeping track in the early '90s. And this isn't just happening on the West Coast. It's happening all over the country.
If you take a look at gas prices going back to July, and just see how quickly this really happened. At the beginning of July, gas prices were about $1.49 for a regular gallon of gas. Right now, they're risen up above $1.60, clocking in at $1.62.
So, what's going on? Well, this is really an issue of supply and demand. Let's talk about some of the supply issues. The government coming out earlier this week saying that inventories are at their lowest level in about nine months, and that means that we have a really tight market, and when there is a tight market, any perceived imbalances can swing prices.
So what's happening in Phoenix right now is having an impact on supply. Even the blackout of 2003 is having an impact, because it knocked nine refineries off temporarily. Also, continued concerns about international tensions impacting imports, and all of this comes at the busiest driving month of the year, which is August.
(BEGIN VIDEO CLIP) JEFFREY SPRING, AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA: There is a lot of recreational driving in August. People take vacations, and they're usually a little longer than just, like, coming home from school or something like that. People go for a week, a week and a half, and so there's a lot of driving involved in that. Especially now, after 9/11, more people are driving on vacation than they were before, and so there's a significant demand.
(END VIDEO CLIP)
ROGERS: Just today, this being a Friday, we've met some people going on vacation. One gentleman was going to Arizona. So, people definitely still have that demand up there.
When is it going to get any better? Well, experts we've talked to say don't expect to see any relief until after Labor Day, and some people say, Miles, we could be in striking distance of those records that we hit this spring. So, it could be a bumpy road ahead -- Miles.
O'BRIEN: Jen, anybody you've talked to there getting ready to trade in those huge SUVs that can take a 36-gallon pump?
ROGERS: Well, we have talked to a number of people filling up rather big tanks. This gentleman here, we said, you know, what (UNINTELLIGIBLE) a huge car? He said, "My wife wanted the car, what can you do?"
Also, we talked to some people, though, Miles, that have those hybrid cars, and they said that they are paying off, having switched and gone that way.
O'BRIEN: Yes, yes, trade in the Ford Valdez for the electronic one. All right, Jen Rogers there in Burbank, appreciate it.
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 August 22, 2003 - 13:17 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Phoenix drivers arent the only ones feeling pain at the pump. Gas prices are up all across the country. So, how high will they go, you might ask? And what's behind this spike?
Let's go to our Jen Rogers, who has some answers. She's outside a gas station in Burbank, California.
Hello -- Jen.
JEN ROGERS, CNN FINANCIAL NEWS: Hi there, Miles.
Well, after some relative stability in 2002, it has been a real rollercoaster ride for gas prices in 2003.
We were just talking to this man. He's filling up his tank here. He has just hit over $70 -- just about $73. Hitting -- we hit record highs here in March. The people in California are not too surprised with what's happening with gas prices. But, you know, they cooled off, and now they're really on fire again. People asking: What is going on?
According to the government, the West Coast saw a 17 cent jump per gallon last week, and that was the second biggest weekly jump they've seen since they started keeping track in the early '90s. And this isn't just happening on the West Coast. It's happening all over the country.
If you take a look at gas prices going back to July, and just see how quickly this really happened. At the beginning of July, gas prices were about $1.49 for a regular gallon of gas. Right now, they're risen up above $1.60, clocking in at $1.62.
So, what's going on? Well, this is really an issue of supply and demand. Let's talk about some of the supply issues. The government coming out earlier this week saying that inventories are at their lowest level in about nine months, and that means that we have a really tight market, and when there is a tight market, any perceived imbalances can swing prices.
So what's happening in Phoenix right now is having an impact on supply. Even the blackout of 2003 is having an impact, because it knocked nine refineries off temporarily. Also, continued concerns about international tensions impacting imports, and all of this comes at the busiest driving month of the year, which is August.
(BEGIN VIDEO CLIP) JEFFREY SPRING, AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA: There is a lot of recreational driving in August. People take vacations, and they're usually a little longer than just, like, coming home from school or something like that. People go for a week, a week and a half, and so there's a lot of driving involved in that. Especially now, after 9/11, more people are driving on vacation than they were before, and so there's a significant demand.
(END VIDEO CLIP)
ROGERS: Just today, this being a Friday, we've met some people going on vacation. One gentleman was going to Arizona. So, people definitely still have that demand up there.
When is it going to get any better? Well, experts we've talked to say don't expect to see any relief until after Labor Day, and some people say, Miles, we could be in striking distance of those records that we hit this spring. So, it could be a bumpy road ahead -- Miles.
O'BRIEN: Jen, anybody you've talked to there getting ready to trade in those huge SUVs that can take a 36-gallon pump?
ROGERS: Well, we have talked to a number of people filling up rather big tanks. This gentleman here, we said, you know, what (UNINTELLIGIBLE) a huge car? He said, "My wife wanted the car, what can you do?"
Also, we talked to some people, though, Miles, that have those hybrid cars, and they said that they are paying off, having switched and gone that way.
O'BRIEN: Yes, yes, trade in the Ford Valdez for the electronic one. All right, Jen Rogers there in Burbank, appreciate it.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
