UK’s oil balance moves into deficit

Nov 09, 2004 01:00 AM

The UK's oil trade balance swung into the red for the first time in 13 years in September, the Office for National Statistics (ONS) has said. The oil balance deficit was £ 254 mm after output was hit by delayed repair work on North Sea rigs, the ONS said.
The news came as the ONS revealed a surprise narrowing in the UK's trade gap with the rest of the world.

A rise in exports to countries outside the European Union helped close the gap to £ 4.55 bn from £ 5.16 bn in August. Experts had forecast that the trade deficit would be little changed at £ 5.1 bn.
"The figures hint that the global economy is getting back on track after the recent soft patch seen in the US," Investec economist Philip Shaw said.

Overall exports rose to £ 16.5 bn in September, their highest level since May 2002 -- but imports also hit a record high, the ONS added. In August, the oil trade balance had stood at a surplus of £ 340 mm.
In August and July, smaller deficits than September's had been recorded in the oil trade balance only to be revised away at a later date.

The UK is traditionally a net exporter thanks to its North Sea oil fields and the ONS added that it expected the UK to return to being a net importer in October. However, analysts said that, even allowing for the disruption caused by maintenance, the deficit was a cause for concern.
"A £ 254 mm oil trade deficit is a worrying sign, especially as the price of oil stays around $ 50 per barrel," said Andrij Halushka of the Centre for Economics and Business Research.

Source: BBC News
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