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CNN Saturday Morning News
General Strike in Venezuela Cuts Into Global Oil Supply
Aired December 21, 2002 - 08:55 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: Venezuela is the fifth largest oil exporter in the world. The ongoing strike there is cutting into global petroleum supplies. And the threat of war with Iraq is compounding that problem. Crude oil jumped pass $30 a barrel on the world market this past week. And our Kathleen Hays says that will pinch your pocketbook.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNNfn CORRESPONDENT (voice-over): The general strike in Venezuela has shut down the nation's oil fields and could not have come at a worst time for the U.S.
The threat of war with Iraq was already pushing oil prices higher. And then there is the early unseasonably cold winter weather in many parts of the country that has boosted demand and run down the nation's supplies.
Now that Venezuela's oil output has slowed to a trickled, and exports have dwindled, crude oil prices have topped $30 a barrel. That means the price of gasoline and home heating costs will also move higher.
JOE TERRANOVA, DR. OF ENERGY TRADING, MBF CORP.: In the near term that is where the consumer will really, really feel the pinch of what has unfolded here with Venezuela and what will potentially unfold with Iraq.
HAYS: Economists say rising energy costs is like a big tax on U.S. consumers. That paying more money to fill up gas guzzling SUVs and heat homes will leave less money in the household budgets.
BILL CHENEY, JOHN HANCOCK FINANCIAL: The problem with oil is that we buy the stuff collectively. It makes us, as a nation, poorer when we have to pay more for our oil.
HAYS: So far, the White House has refused to dip into the nation's petroleum reserves, even though two oil companies asked them to, saying the disruptions are not severe enough to take such a step. Traders are betting that President Bush will soon change his mind.
PHIL FLYNN, ALARON.COM: I would be surprised if the Bush administration does not change its idea about using oil from the reserve, if this continues for any extended period of time.
HAYS: One big issue is logistics. Oil tankers take weeks to get from the Mid East to the U.S., but only four days to arrive from Venezuela. That is why the shut down in Venezuela has affected U.S. markets so quickly. And why traders think gas prices could continue to move higher in the new year.
HAYS (on camera): In a speech this past week, Federal Reserve Chairman Alan Greenspan said rising oil prices are weighing on the U.S. economy. In fact, he has pointed out many times that all of the recent U.S. recessions were preceded by big spikes up in energy prices.
Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
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 December 21, 2002 - 08:55 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Venezuela is the fifth largest oil exporter in the world. The ongoing strike there is cutting into global petroleum supplies. And the threat of war with Iraq is compounding that problem. Crude oil jumped pass $30 a barrel on the world market this past week. And our Kathleen Hays says that will pinch your pocketbook.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNNfn CORRESPONDENT (voice-over): The general strike in Venezuela has shut down the nation's oil fields and could not have come at a worst time for the U.S.
The threat of war with Iraq was already pushing oil prices higher. And then there is the early unseasonably cold winter weather in many parts of the country that has boosted demand and run down the nation's supplies.
Now that Venezuela's oil output has slowed to a trickled, and exports have dwindled, crude oil prices have topped $30 a barrel. That means the price of gasoline and home heating costs will also move higher.
JOE TERRANOVA, DR. OF ENERGY TRADING, MBF CORP.: In the near term that is where the consumer will really, really feel the pinch of what has unfolded here with Venezuela and what will potentially unfold with Iraq.
HAYS: Economists say rising energy costs is like a big tax on U.S. consumers. That paying more money to fill up gas guzzling SUVs and heat homes will leave less money in the household budgets.
BILL CHENEY, JOHN HANCOCK FINANCIAL: The problem with oil is that we buy the stuff collectively. It makes us, as a nation, poorer when we have to pay more for our oil.
HAYS: So far, the White House has refused to dip into the nation's petroleum reserves, even though two oil companies asked them to, saying the disruptions are not severe enough to take such a step. Traders are betting that President Bush will soon change his mind.
PHIL FLYNN, ALARON.COM: I would be surprised if the Bush administration does not change its idea about using oil from the reserve, if this continues for any extended period of time.
HAYS: One big issue is logistics. Oil tankers take weeks to get from the Mid East to the U.S., but only four days to arrive from Venezuela. That is why the shut down in Venezuela has affected U.S. markets so quickly. And why traders think gas prices could continue to move higher in the new year.
HAYS (on camera): In a speech this past week, Federal Reserve Chairman Alan Greenspan said rising oil prices are weighing on the U.S. economy. In fact, he has pointed out many times that all of the recent U.S. recessions were preceded by big spikes up in energy prices.
Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
