U.S. Trade Deficit and the Impact of Changing Oil Prices
LIBRARY OF CONGRESS WASHINGTON DC CONGRESSIONAL RESEARCH SERVICE
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Petroleum prices rose sharply in the first half of 2008, at one time reaching more than 140 per barrel of crude oil. After July 2008, however, petroleum prices and import volumes fell at a historically rapid pace in January 2009, prices of crude oil fell below 40 per barrel. Since then, crude oil prices have nearly doubled, while the average monthly volume of imports of energy related petroleum products has fallen nearly 10 year over year. Despite the drop in the volume of crude oil imports, the rise in the cost of energy imports through 2009 and early 2010 could add more than 100 billion to the nations trade deficit in 2010 over that experienced in 2009. Should the U.S. economic recovery continue strongly in the second half of 2010, it could increase both the volume of energy imports and the price of those imports. This report provides an estimate of the initial impact of the changing oil prices on the nations merchandise trade deficit.
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