US trade gap widens to record $68bn

US trade gap widens to record $68bn
WASHINGTON, Sept 12
© Reuters Limited


The US trade deficit widened much more than expected in July to a record $68 billion dollars as record oil prices pushed America’s monthly oil import bill to an all time high, a government report showed on Tuesday.

The trade gap widened 5 percent from June for the biggest month-to-month increase in nearly a year, the Commerce Department said. Wall Street analysts surveyed before the report had expected higher oil prices in July to widen the trade gap to $65.5 billion.

The U.S. petroleum trade deficit hit its second highest level on record, as tensions over Iran’s nuclear program and strong demand in the United States and developing countries like China pushed oil future prices in July to more than $78 per barrel.

Oil prices have fallen more than 15 percent since the peak in July. The Organization of Petroleum Exporting Countries agreed on Monday to keep pumping at the high level of 28 million barrels per day, but left the door open to production cuts later this year.

U.S. imports from OPEC were a record $14.0 billion in July and the U.S. trade gap with the international oil cartel was a record $10.9 billion.

The volume of U.S. crude oil imports declined in July to about 10.4 million barrels per day, from 11.0 million in June. However, the value of the oil imports hit a record $20.8 billion during the month.

July imports of industrial goods and materials, capital goods and consumer goods also set records in July, reflecting the strength of the U.S. economy.

Imports from both China and the European Union set records during the month.

U.S. exports of consumer goods and autos and auto parts set a record in July, pushing overall U.S. exports to the second highest level ever.

A decline in the value of the dollar versus other major currencies has helped boost exports over the past several years.