Falling oil imports shrink US trade gap in February

The US trade deficit shrank sharply in February to the lowest level in over five years as the country’s oil import bill continued to drop, the Commerce Department reported Thursday.

The trade gap fell to $35.4 billion in February, plunging almost 17 percent from January’s upwardly revised $42.7 billion, the department said.

The decline surprised analysts who expected the trade gap would rise due to the stronger dollar.

US exports of goods and services fell 1.6 percent to $186.2 billion in February.

But that drop was eclipsed by a 4.4 percent drop in imports — the sharpest monthly decline in six years — to $221.7 billion.

That was mainly due to another large fall in imports of petroleum products, down 16 percent on the month, to $16.3 billion, amid lower crude-oil prices.

As a result, the US trade shortfall in petroleum products, at $8.1 billion, was the smallest since July 2002.

Despite the dollar’s strength, which the Federal Reserve has forecast would weigh on US exports, US consumer goods exports hit a record high in February.

The politically sensitive deficit with China shrank 21.3 percent to $22.5 billion on a steep drop in Chinese imports.

The trade gap with the European Union was little changed since February, at $10.4 billion.