Oil prices swell US trade deficit

Despite surging crude oil prices, petroleum imports rose

Rising oil prices saw the US trade gap swell in July to its widest level since March 2007, government figures show.

The trade deficit widened to $62.2bn (£35.4bn) in the month from an upwardly revised estimate of $58.84bn in June.

As crude prices have soared this year, oil imports also increased by about 15% in the month - taking the petroleum deficit to a record $43.3bn.

Excluding petroleum products the US trade deficit shrank to its lowest level since October 2002.

Oil prices are currently around the $100 a barrel mark after surging as high as $147 in July.

Export boost

Meanwhile, US exports got a boost from the weakening of the dollar as it made US goods more attractive to other countries.

As a result exports of goods and services rose 3.3% to a record $168.1bn.

Analysts said that exports should remain strong despite fears the dollar's recent strength against the euro and other major currencies would make US-made goods less competitive on international markets.

"People are concerned that the dollar's going to change what's going on with exports," said Marc Pado, US market strategist at Cantor Fitzgerald.

"I really disagree with that. It takes years to build up a relationship and to build a business for exports. It doesn't change with the first tick of the dollar."