U.S. Trade Deficit and the Impact of Changing Oil Prices Page: 4 of 10
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U.S. Trade Deficit and the Impact of Changing Oil Prices
According to data published by the Census Bureau of the Department of Commerce,' the prices
of petroleum products over the first half of 2008 rose sharply, generally rising considerably faster
than the change in demand for those products, before falling at a historic rate. After falling each
month since August 2008, average petroleum prices reversed course and rose by 30% between
February and May 2009 and reached over $70 per barrel in June 2009. As a result of changing
petroleum prices, the price changes in imported energy-related petroleum products worsened the
U.S. trade deficit in 2006, 2007, and 2008. Energy-related petroleum products is a term used by
the Census Bureau that includes crude oil, petroleum preparations, and liquefied propane and
butane gas. Crude oil comprises the largest share by far within this broad category of energy-
related imports. The slowdown in the rate of growth in the U.S. economy is sharply reducing the
amount of energy the country imports and is helping to push down world energy prices. In
isolation from other events, lower energy prices tend to aid the U.S. economy, which makes it a
more attractive destination for foreign investment. Such capital inflows place upward pressure on
the dollar against a broad range of other currencies. To the extent that the additions to the
merchandise trade deficit are returned to the U.S. economy as payment for additional U.S. exports
or to acquire such assets as securities or U.S. businesses, the U.S. trade deficit could be mitigated
Table 1 presents summary data from the Census Bureau for the change in the volume, or quantity,
of energy-related petroleum imports and the change in the price, or the value, of those imports for
2008 and for 2009. The data indicate that during the first five months of 2009, the United States
imported 1,824 million barrels of energy-related petroleum products, valued at $81 billion.
Energy-related imports for this five-month period were down 4.7% in volume terms from the
same period in 2008 and cost slightly more than half the value of such imports in 2008.
The data also indicate that the United States imported 4.6 billion barrels of total energy-related
petroleum products in 2008, valued at $439 billion, compared with a total value of $319 billion in
2007. In 2008, the quantity of energy-related petroleum imports fell by 4.0% compared with the
comparable period in 2007; crude oil imports also fell by 2.7% from the same period in 2007.
Year-over-year, the average value of energy-related petroleum products imports rose by 37.6%,
while the average value of crude oil imports rose by 44.2%. As Figure 1 shows, imports of
energy-related petroleum products can vary sharply on a monthly basis, but averaged about 384
million barrels a month in 2008.
1 Census Bureau, Department of Commerce. Report FT900, U.S. International Trade in Goods and Services, July 10,
2009. Table 17. The report and supporting tables are available at http://www.census.gov/foreign-trade/Press-Release/
current press release/ftdpress.pdf.
Congressional Research Service
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Jackson, James K. U.S. Trade Deficit and the Impact of Changing Oil Prices, report, July 14, 2009; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc820904/m1/4/: accessed December 18, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.