The Commerce Department reports the trade deficit for October jumped 8.6% to a ninth-month high of $48.7 billion up from $44.9 billion. Imports climbed 1.6% to a record $244.6 billion. Exports were unchanged at $195.9 billion. Nearly half of the increase in the trade deficit was tied to larger imports of oil at higher prices. The average cost of a barrel of oil rose above a two-year high of $47.26. Non-petroleum imports also set a new high. Goods like cell phones and high definition televisions imported from China, Mexicom and the European Union all hit records.
Oil prices are holding steady with January crude up 9 cents to $57.54 on the New York Merc. The Organization of the Petroleum Exporting Countries reached an agreement last week with other major producers, including Russia, to extend their production-cut pact through 2018. Even though it will be reviewed at the group’s next meeting in June. The risk to the OPEC deal is US production. Baker Hughes count of active drilling rigs was up 6 from last week and up 332 from a year ago and the deal has raised expectations for growth in U.S. shale output.
Serving the West Side first, I am Bill Roller of BR Capital for 1360 KUIK.
