Tuesday, March 7, 2017

That OPEC Cut? I'm Not Seeing It -- March 7, 2017

Updates

Later, 10:40 p.m. Central Time: see first comment. To make it goggle-searchable --
All that comes from Tables 7 & 8 of today's report, where there's a couple hundred line items listed: https://www.bea.gov/newsreleases/international/trade/2017/pdf/trad0117.pdf.

This is the point: we should really net out our oil & product imports and exports for the complete picture.
Bill McBride has a monthly chart that does just that:
https://1.bp.blogspot.com/-zrkWtpyEPFg/WL64Xcy8KeI/AAAAAAAAqak/aZ3UkaHqTIMUouhJbySOiyvU_KAN5QAywCLcB/s1600/TradeDeficitJan2017.PNG.
The black graph is the petroleum deficit, red is everything else, and blue is the total. From this, one can see that oil & oil products aren't nearly as big a part of the trade deficit as they were 5 years ago, because as our imports rose, our exports rose even faster.
Original Post
 
The other day I mentioned that with regard to all that talk about OPEC and non-OPEC crude oil cuts, I wasn't seeing it. Now, today, Reuters is reporting that US imports of crude oil have actually increased the US trade deficit to near five-year high. Link here in The Dickinson Press.
The U.S. trade deficit jumped to a near five-year high in January as rising oil prices helped to push up the import bill, pointing to slower economic growth in the first quarter and posing a challenge for the Trump administration.
President Donald Trump took office with a pledge to boost annual economic growth to 4 percent and renegotiate trade deals in favor of the United States. Trump blames U.S. trade policy for the loss of American factory jobs and the import-driven surge in the trade gap could intensify the debate on a cross-border tax.
The article mentions "rising" oil prices and yet, from my perspective, oil is pretty cheap, unless they are comparing today's $50-oil to 2014's $100-oil.

And I guess that's what they are doing. Near the bottom of the article;
The price of imported oil averaged $43.94 per barrel in January, the highest since August 2015. That pushed the value of petroleum imports to a two-year high. Imports of cell phones and other household goods rose $1.0 billion, while those of automobiles hit a record high.
A "five-year" high takes us back to 2012. Between February, 2012, and July, 2014, WTI averaged around $100, starting with $114 in February, 2012. 

4 comments:

  1. it just so happens that i already dug through that report this morning looking for the big ticket changes...it's a bit more complicated than that article lets on; imports were up a total of $5.3 billion...here's the big import changes, by end use category:
    - our imports of consumer goods rose by $2,406 million to $52,061 million on a $1019 million increase in our imports of cellphones, a $281 million increase in our imports of nonwool or cotton clothing and textiles, a $236 million increase in our imports of TVs and video equipment, a $208 million increase in our imports of toys, games and sporting goods, and a $205 million increase in our imports of gem diamonds...
    -our imports of industrial supplies and materials rose by $1,001 million to $42,015 million as our imports of crude oil rose by $1,672 million, our imports of fuel oil rose by $436 million and our imports of other petroleum products rose by $493 million, while our imports of coal fell by $306 million and our imports of fertilizers fell by $370 million....
    - our imports of automotive vehicles, parts and engines rose by $899 million to $31,763 million on a $688 million increase in our imports of new and used passenger cars and a $383 million increase in our imports of trucks, buses, and special purpose vehicles..
    - our imports of capital goods rose by $688 million to $51,091 million on a $374 million increase in our imports of semiconductors...

    now, the thing is, exports were also up, by a net of $1.1 billion, and oil related exports were a big part of that:
    our exports of industrial supplies and materials rose by $2,082 million to $37,961 million on a $697 million increase in our exports of crude oil and a $548 million increase in our exports of petroleum products other than crude of fuel oil...
    all that comes from Tables 7 & 8 of today's report, where there's a couple hundred line items listed: https://www.bea.gov/newsreleases/international/trade/2017/pdf/trad0117.pdf

    point is, we should really net out our oil & product imports and exports for the complete picture...Bill McBride has a monthly chart that does just that:
    https://1.bp.blogspot.com/-zrkWtpyEPFg/WL64Xcy8KeI/AAAAAAAAqak/aZ3UkaHqTIMUouhJbySOiyvU_KAN5QAywCLcB/s1600/TradeDeficitJan2017.PNG
    the black graph is the petroleum deficit, red is everything else, and blue is the total...you see oil & oil products aren't nearly as big a part of the trade deficit as they were 5 years ago, because as our imports rose, our exports rose even faster...

    ReplyDelete
  2. It will take me awhile to get through all that, but if you not careful you will end up being a permanent contributor to the blog. The job comes with no pay, no benefits, and no recognition, but other than that, it's a great gig.

    ReplyDelete
  3. like i said, i already had most of that written, so editing it a bit to add it here wasn't as much extra effort as the long comment looks like...the trade deficit is one of the topics i've covered for my own blogs for what? 6 or 7 years, i guess.

    damn, that's been a long time...

    ReplyDelete
    Replies
    1. Time goes by fast. And one learns a lot through a blog.

      But I do the same. If I've sent an e-mail that can work for the blog, I cut and paste.

      Delete