US trade deficit poised to widen as oil hits $67
US trade deficit poised to widen as oil hits $67 - Economics - Times Online
By Gary Duncan, Economics Editor
SOARING oil prices have contributed to a sharp widening in America’s yawning trade gap in June, compounding concerns over the economic fallout from the rising cost of fuel.
In worse than expected figures, which came as crude prices continued to set new highs on world markets yesterday, the US trade deficit for June widened by more than 6 per cent, to $58.5 billion (£32.2 billion).
The jump in the deficit came as the cost of America’s overseas purchases of petroleum products pushed its imports bill to a record, while export trade remained flat.
The deficit on US trade in petroleum leapt to $17.8 billion, its second-highest level on record. US imports from countries in the Opec cartel also set a record, at $21 billion for June.
With the impact of high oil prices on the June trade gap coming at a time when crude still stood at a monthly average of about $55 a barrel, the subsequent further rise in oil prices suggested the deficit can only deteriorate further.
Benchmark crude prices set a record yesterday for the fourth day out of the past five as they headed higher. US light crude for delivery in September gained $1.30 to hit $67.10 a barrel by early afternoon in New York.
In London, North Sea benchmark Brent crude rose $1.08 to $66.46 a barrel.
The latest price jump came as oil markets continued to fret over a combination of terrorist threats in Saudi Arabia, refinery bottlenecks, short supplies from non-Opec producers, and potent demand.
Hugo Chavez, president of Venezuela, an Opec member state, sounded a chilling warning over present conditions. “We are on the verge of an oil crisis. Oil prices will keep rising simply because the reserves are running out.”
John Snow, the US Treasury Secretary, sought to ease concerns. He said that the American economy was continuing to grow in the face of high energy prices and “can continue to do so”, although he conceded that rising oil costs “certainly don’t help”.
The toll on American consumers’ confidence from rising fuel prices was highlighted by the latest snapshot of sentiment from the University of Michigan. In a worse than expected fall, its headline confidence index dropped to 92.7 in a preliminary August figure, from 96.5 in July. The fall marked the first drop in sentiment since May and was immediately blamed on spiralling petrol prices. “Unless there is a sudden drop in gas prices over the next few weeks, this decline in sentiment rightly will be reflected in weaker core retail sales numbers over the next couple of months,” Ian Shepherdson, a US economist with High Frequency Economics, said.
By Gary Duncan, Economics Editor
SOARING oil prices have contributed to a sharp widening in America’s yawning trade gap in June, compounding concerns over the economic fallout from the rising cost of fuel.
In worse than expected figures, which came as crude prices continued to set new highs on world markets yesterday, the US trade deficit for June widened by more than 6 per cent, to $58.5 billion (£32.2 billion).
The jump in the deficit came as the cost of America’s overseas purchases of petroleum products pushed its imports bill to a record, while export trade remained flat.
The deficit on US trade in petroleum leapt to $17.8 billion, its second-highest level on record. US imports from countries in the Opec cartel also set a record, at $21 billion for June.
With the impact of high oil prices on the June trade gap coming at a time when crude still stood at a monthly average of about $55 a barrel, the subsequent further rise in oil prices suggested the deficit can only deteriorate further.
Benchmark crude prices set a record yesterday for the fourth day out of the past five as they headed higher. US light crude for delivery in September gained $1.30 to hit $67.10 a barrel by early afternoon in New York.
In London, North Sea benchmark Brent crude rose $1.08 to $66.46 a barrel.
The latest price jump came as oil markets continued to fret over a combination of terrorist threats in Saudi Arabia, refinery bottlenecks, short supplies from non-Opec producers, and potent demand.
Hugo Chavez, president of Venezuela, an Opec member state, sounded a chilling warning over present conditions. “We are on the verge of an oil crisis. Oil prices will keep rising simply because the reserves are running out.”
John Snow, the US Treasury Secretary, sought to ease concerns. He said that the American economy was continuing to grow in the face of high energy prices and “can continue to do so”, although he conceded that rising oil costs “certainly don’t help”.
The toll on American consumers’ confidence from rising fuel prices was highlighted by the latest snapshot of sentiment from the University of Michigan. In a worse than expected fall, its headline confidence index dropped to 92.7 in a preliminary August figure, from 96.5 in July. The fall marked the first drop in sentiment since May and was immediately blamed on spiralling petrol prices. “Unless there is a sudden drop in gas prices over the next few weeks, this decline in sentiment rightly will be reflected in weaker core retail sales numbers over the next couple of months,” Ian Shepherdson, a US economist with High Frequency Economics, said.
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