Higher Oil Prices Widen U.S. Trade Deficit

By Tsvetana Paraskova 

The U.S. trade deficit increased to $48.7 billion in October from $44.9 billion in September amid rising imports and higher crude oil prices, increasing the value of U.S. oil imports, government data showed on Tuesday.  

Total U.S. exports were $195.9 billion in October, down by less than $0.1 billion from September. Imports, on the other hand, increased to $244.6 billion in October, up from $240.8 billion in September.

The trade deficit increased to the highest since January and was above expectations of a Reuters poll of economists who had predicted the October deficit would stand at $47.5 billion.

Imports of industrial supplies and materials increased $1.8 billion, reflecting a $1.5 billion increase in crude oil imports. The U.S. crude oil imports rose to $10.664 billion in October from $9.131 billion in September.

The average import price of crude oil stood at $47.26 per barrel in October, the highest level since August 2015, when it was $49.33, according to the Monthly Trade Highlights.  

Apart from the $1.5-billion increase in crude oil imports, the higher U.S. import bill was due to the highest on record imports of food, feeds, and beverages, and the highest on record non-petroleum imports. 

Other highlights in overall international trade of the U.S. last month include the highest imports on record from China, from Mexico, and from the European Union.

In exports, U.S. October exports to China were the highest since December 2013, exports to Mexico were the highest since October 2014, and exports to Brazil were the highest since October 2014.

The goods deficit with China increased from $34.6 billion in September to $35.2 billion in October. U.S. exports to China increased $2.2 billion to $13.0 billion, primarily driven by soybeans and crude oil.

The U.S. trade deficit with Canada increased from $300 million in September to $1.8 billion in October, with U.S. imports rising $1.4 billion–primarily crude oil–to $25.8 billion.  

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