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16

US Trade Deficit Lowered by Oil Prices

The US trade deficit came has decreased due to low oil prices

The U.S. trade deficit came in at $56.5 billion for September — down $2.6 billion and 4 percent from August, but up 1.8 percent from the same month last year.

U.S. exports -- which have been cited by businesses and free trade advocates as a bright spot in the economy -- went from $165 billion in August to $155 billion in September but are up 8 percent from September 2007, according to the U.S. Census Bureau.

The drop in crude oil prices and the slower U.S. and international economies helped narrow the gap between U.S. exports and foreign imports coming into the country. Crude oil was trading at $56 per barrel Thursday, according Oil-Price.net.

The recent and somewhat dramatic drop in oil has reduced the value of foreign oil imports into the U.S. The slower economy and lower demand for gasoline are also reducing oil demand.

The U.S. Census Bureau said the trade deficit with Mexico, for example, went from $5.9 billion in August to $4.9 billion in September. Mexico is a leading oil producer.

Author: Jo Amey