WIRE:04/19/2000 09:15:00 ET Oil Prices Swell February Trade Gap to Record

WASHINGTON (Reuters) - The U.S. trade deficit hit a record $29.2 billion in February as oil import prices rose to their highest level since the Kuwait oil crisis more than nine years earlier, the government said on Wednesday. The trade deficit rose 6.5 percent from January's $27.4 billion as imports of crude petroleum rose to a record $6.5 billion, the Commerce Department said.

The dollar dipped on the news, which produced an even wider deficit than the $28.4 billion analysts surveyed by Reuters had expected, and gave yet another clue to the stubborn strength of the still booming U.S. economy.

"We got a little bit more than expected, but not enough to influence anyone into buying euro at this point," Patricia Lifson of PNC Bank in Pittsburgh told Reuters Television.

Commerce said the price of imported crude oil rose to an average $25.01 per barrel in February from $23.18 per barrel the previous month, the highest level since December 1990.

That increase helped push overall imports to a record $113.4 billion in February, up from $111.8 billion the previous month.

Exports weakened to $84.2 billion from $84.3 billion in January, held back by civilian aircraft exports which fell to $1.6 billion from $2.6 billion the previous month.

"We have a global economic upswing right now, and you would expect our exports to be increasing, but they are stagnating," said Jay Bryson, global economist, at First Union Corp. in Charlotte.

"At least for Fed policy, these numbers still show that domestic demand is still very, very strong. It will keep the Fed on a tightening course. It's not a reason for the Fed to relax its policies right now."

The trade deficit with Japan increased to $6.7 billion from $5.6 billion in January, while the deficit with China declined to $5.6 billion from $6.0 billion. Imports from Mexico were a record $10.4 billion

http://abcnews.go.com/wire/US/index.html

-- Martin Thompson (mthom1927@aol.com), April 19, 2000