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  • August 30, 2008 09:27 PM EDT by Liz Claman

    Gustav and Gasoline Prices!

    Hi gang,

    I completely panicked Thursday night.  Right after leaving work at Fox Business in the heart of NYC, I headed straight for my Exxon Mobil (XOM) gas station on Rt. 1/9 in Fort Lee, N.J.  I thought, "Omg, I have GOT to fill up the tank before Gustav gets to it and it costs me so much more!"  So I put the pedal to the medal and zoomed there, pulling in with such speed that the attendant looked a little alarmed.  I had Kid Rock blasting on the XM satellite radio (XMSR) but immediately turned it down and said, "Fill it up with Plus, please!"  (You can't pump your own gas in New Jersey...they won't let you. Whatev.)

    My panic was goosed by the fear that Tropical Storm Gustav (now, as of this afternoon, upgraded to Hurricane status) would head toward the Gulf of Mexico and jack up prices.  I smugly cooled my jets, thinking I had somehow beaten the clock to the punch as I paid $3.56 cents per gallon.  (Cheap, right?)

    What an idiot.  Oil DROPPED today.  It was essentially flat on the session, and the fell further in the after-market hours by about 13 cents. 

    JUST WHEN YOU THINK YOU KNOW WHERE OIL IS GOING, IT DOES A HEAD FAKE. 

    However, yesterday (Friday) afternoon on Countdown to the Closing Bell, Jeff Rubin of CIBC World Markets, where he's the chief economist and strategist, breezed down from Canada like a frigid Alberta Clipper and rained on my pathetic little "I-gassed-up-on-the-cheap" parade. 

    Jeff's an awfully smart guy.  He says Gustav will destroy U.S. attempts at energy self-suffiency and will eventually push gasoline prices up to $5 a gallon, where they will stay for a very long time.   He says oil production in the rig-dotted Gulf will be increasingly threatened by severe storms that continue to grow in frequency and strength in the region.  (So far he's right: what were the chances that we'd see yet another major hurricane heading right to Louisiana just three years after Katrina?)  

    He also said even if drilling in Alaska were green-lit pronto, we'd see the first drops of crude in 2018...long after we will have finally invented cars that don't even NEED to run on the stuff.  Oh, and YES, I asked him about the oilsands up in Alberta and whether that will eventually supplant the crude we're begging hostile countries for now. 

    The short answer? Nah.  You ready for why? Rubin says it takes 1,200 cubic feet of natural gas to create one single barrel of synthetic oil from the Canadian sands.  

    Peter Schiff of EuroPacific Capital told me that's like saying, "Hey, I found a way to manufacture gold by using platinum!"  It just doesn't make financial sense.

    Have a GREAT holiday weekend.  Oh, and did I tell you how much I appreciate that you're watching me and the gang on Fox Business?

    --Liz

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Mike Desmond

Major hurricane? I realize this is done in hindsight but really this was not major within 24 hours very little damage was assessed and only Geraldo was still breathless from spotting that Corp of Engineers person in the water. Stop the HYPE, report the story. That is what we need. Hey that's even better than Fair and Balenced. Mike Desmond Cincinnati, OH

September 5, 2008 at 9:19 am

chuck

Liz here's a story that has emerged down here. Well Entergy is trying to block certain financial information from going public. They acted like they have something hide. Now this story broke last week in the Clarion Ledger and this could related to the fact they wanted to raise the rates higher which the state public service commission disapproved of. The new rate charges they want to implement is related to one of thier subcontractors. Why not look into it? What have they got to hide?

September 2, 2008 at 11:19 am

chuck

Liz for a followup story on retail gas prices the jobbers should be in news media limelight as well. Why? They have as much to do with setting gas prices and getting some of the take as do speculators. Evidence could be pointed right here in Vicksburg ms where one jobber controls everything. This monopoly has upset everyone since 06 when barrel oild prices were below 50.00 and the gas prices didn't fall below 2.00. Questions do jobbers set the gas prices in thier market? How much do they sell thier gas to the local retailers. I believe it's time their associations get question on issues on blocking competition in certain market places and exploiting others. Like say New York City,Miami,and Los Angelese. What right do a few have to tell a Kroger,Walmart,Cotsco NO N THIER MARKETPLACE.

September 2, 2008 at 7:31 am

Dana Swan

Good article Liz, Please follow it up with reasearch on the upcoming Israeli attack on Iran and the effects of that on oil prices too....

September 1, 2008 at 11:43 am

chuck

Liz I've been busy. Busy tracking Hurricane Gustav. My knowledge came in handy in the office for I'd kept my boss in the loop about the hurricane. Since Friday and yesterday I've been tracking it. And I've been tracking gas prices too. I still think it's unfair that New Yorkers like u have unfair gas prices. Don't worry you're not alone: Supertalk Radio has been reporting on unfair gas pricing all across the state of Mississippi and commidity oil prices. I learned too that the state of Mississippi doesn't have a gas price gauging law to protects its citizens. Something needs to be done. I still believe it's time to look at the jobbers,convient store chains and see where they play thier roles in the retail gas price game. And the DRILL NOTHING Congress needs to feel a lot of heat too. Well I catchya later I got to read the 1am Hurricane update. By the way on my day off u and David Asman make my day. Tell Tracey Byrnes hello for me ok?

September 1, 2008 at 1:59 am

bob tanner

Liz you kindadid overreact...i think that by wed. the price will stabilize AFTER the storm passes and damage is assessed...like the song says---RELAX DON'T WORRY BE HAPPY!!!!!! By the way I agree whole heartedly about dumping Fannie and Freddie...they're a boondoogle(sp?) around the finacial market and by letting them go it will 1.shake things up and 2.things will settle to a new normal... bob tanner portland me truck driver listening on XM all day long

August 31, 2008 at 8:14 pm

Calgary Jack

actually, it does make financial sense: since approximately 6000 cubic feet of natural gas equals one barrel of oil, it only takes 1/5 of a b.o.e to create a new barrel of syncrude. Why doesn't that make economic sense? Oh that's right: it makes perfect sense. Rubin either doesn't know energy AT ALL or his explanation got lost in translation. The gold and platinum statement doesn't fit either. Weird post all the way around.

August 31, 2008 at 10:54 am

Joe

It's people like this that cause the gas prices to go up. To often when people are talking about te gas prices, 99% of the time i hear "well they said it was going to go that high" so if they say everyone should jump of a building we all should start to just because "they said" "I completely panicked Thursday night. Right after leaving work at Fox Business in the heart of NYC, I headed straight for my Exxon Mobile" "He says Gustav will destroy U.S. attempts at energy self-suffiency and will eventually push gasoline prices up to $5 a gallon where they will stay for a very long time" first off your still going to by gas from companies that report billion dollar earning and growth at the expense of americans!!!!!!!!!! second it's becaue of people like this that say if this happence and thay happence gas is going to go to $5/gal. Then when it happence everyone says o well the news said it would. Stop putting the idea in ignorant catle like people's mind!!! I would really like to know what happened to people thinking for them sels instead of the media/news/goverment thing for them!!!!!!!!!!!!!!!!!!!!!!!!!!!!

August 31, 2008 at 9:28 am

about this blog

  • Liz Claman joined FOX Business Network (FBN) as an anchor in October 2007. Her debut included an exclusive interview with Berkshire Hathaway CEO and legendary investor Warren Buffett.

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