Oil Export Reduces U.S Trade Deficit Significantly

In the month of December, there were record petroleum exports that helped reduce trade deficit of the U.S in the last three years, as the nation is attempting to achieve energy self-sufficiency.

Austin, United Kingdom (prHWY.com) March 21, 2013 - In the month of December, there were record petroleum exports that helped reduce trade deficit of the U.S in the last three years, as the nation is attempting to achieve energy self-sufficiency. Attaining energy self sufficiency is the goal of the nation, which it has been pursuing since 1973.

The gas constricted 20.7% to $38.5 billion, which is the smallest since January 2010. This is lower than the estimate of 73 economists in Bloomberg Survey. Oil exports went up to $11.6 billion. In addition to reducing the trade deficit, the greater fuel self sufficiency can also help boost employment rate, household income and government revenue, making American companies more viable. Record oil exports to South and Central America reflect the improving global economy trend, which will benefit companies like Caterpillar Inc.

Andy Lipow, the president of Lipow Oil Associates LLC said, "The trend towards energy self-sufficiency is picking up and this will surely help our economy. If our oil production increases, out dependence on oil from other parts of the world will come down".

Stock value increased and sent the index of Standard and Poor's 500 to the highest level. The Standard and Poor 500 increases 0.6% to 1,517.93. Shares of oil and gas companies like Valero Energy Corp and Hess Corp also increased.

A report of the Commerce Department showed that the stockpiles at the wholesalers in the country reduced 0.1% in December. This turn down followed a 0.4% gain. The decline in stockpiles means the stocks may deduct more from the fourth quarter economic quarter than estimated. This would offset the benefit from the narrower trade deficit partially. These reports prompted the economists at Barclays Plc, JP Morgan Chase and Co and Morgan Stanley to revise their estimates of fourth quarter economic growth.

The increase in fuel sales to buyers abroad along with the purchase of the smallest number of barrels of crude oil from other nations in 16 years led to a very small petroleum deficit since August 2009. A rush in oil production in the U.S has made the country the largest fuel exporter in the world. There was an increase of 59% in the petroleum product exports to Brazil from January to November 2012. Around 255,000 barrels of petroleum products were exported daily. The import of petroleum products of Venezuela from the U.S increased to 56%.

The U.S fulfilled 84% of its own energy requirements in the first January to October 2012, which is the highest annual rate since three decades. The crude output of the nation rose by 766,000 barrels a day, which is the highest in the last 15 years.

The increasing fuel efficiency of the passenger vehicles in the U.S. has helped to reduce the demand for oil. As the country takes further measures to produce energy, the economy will benefit from a narrowing trade deficit, income growth, job and improvement in manufacturing and service industries. Bloomberg economists estimate the trade deficit of the U.S will reduce to $46 billion. Brian Jones, a senior economist in the U.S said that the improvements in oil exports are encouraging.

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