Return to Transcripts main page

CNN Live Sunday

Report Says Price of Gasoline At All-Time High

Aired May 06, 2001 - 17:02   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.
STEPHEN FRAZIER, CNN ANCHOR: Joining us from New York, energy analyst Robert Gibbons, who's an energy reporter for Bridge News, a business news service.

Mr. Gibbons, thanks for joining us.

ROBERT GIBBONS, BRIDGE NEWS: Thank you.

FRAZIER: You heard that it's not really an issue here of supply of gasoline -- or, it's gasoline, not crude -- what does that tell you then for the future?

GIBBONS: Well, it means that any time there is an interruption in the refining sector, due to a fire or a mishap in the production cycle, you are -- you have a market that's ready to jump up at the slightest interruption in the ability of the refiners to put product out on the market. There hasn't been a brand new refinery built in over a decade in the U.S.

And the Lundburg report and the president seemed to both agree, that it's crude oil, is not the problem in terms of supply of crude. But the fact that there is not enough refining capacity in the U.S..

FRAZIER: She also cited an increase in imports, and I believe she means imports of gasoline itself. I didn't know that there was such a thing as imported gasoline.

GIBBONS: Yes. The high prices in the United States, in fact, hit a record high of $1.16 for June futures (ph) Monday, but the fact that the prices are so high here have stimulated imports largely from Europe but also have Asia. The U.S. does import gasoline from Venezuela, Europe and Asia.

FRAZIER: Let's talk about what it means for drivers now. One expert said he believed that the height of the driving season, which is around the 4th of July, price would actually be lower than now. Why would that be?

GIBBONS: Well, one of the things people will be looking for, is if there is a demand response. In other words, if the high prices are able to dampen the American, you know, capacity to consume gasoline. So far, that has not -- demand response has not hit. So, if you have a combination of high imports coming to get the high prices that are available in the United States, and then the high prices of -- that drive down demand slightly, and the ability of the U.S. refineries to stay at close to 100 percent capacity in terms of their ability to produce, then you could see prices pull back a little bit.

FRAZIER: Right. Now, from your position, reporting on energy, what does this tell you about the economy as a whole?

GIBBONS: Well, I also report on utilities, and I know that in a lot of the earnings reports, from the utilities that have been coming out this month, they have -- a lot of them reported slumping industrial demand.

A lot of times their earnings were not hurt because they were able -- the high prices of generated power, they were able to overcome the lower retail demand in their industrial sector.

But that does say something about the economies if you have got utilities, which usually work pretty closely with their chambers of commerce in order to attract industry to the area. And if they're reporting first quarter slumping industrial demand, then that should be somewhat of an indicator that there's a little bit of a economic weakness out there.

FRAZIER: Indeed. Well, thank you for those insights, Robert Gibbons, from Bridge News. Glad you came in today.

GIBBONS: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com