US Trade Tops $5 Trillion and US Oil Production Expected to set Record in 2015

Mark Perry notes two interesting bits of news on his Carpe Diem blog.

Total US Trade (imports + exports) hit $5.016 Trillion in 2013. US exports totaled $2.27 trillion and imports totaled $2.74 trillion in 2013. So the export/import ratio was 82%, which means that 82 cents of every dollar spent on exports came back to the US in the form of payments for US exports (with the other 18 cents coming back in the form of purchases of US capital).

Perry notes that most of the media coverage is talking in terms of the "bad news" of the US trade deficit or "good news" of strong US exports. Perry sees a different story:

What probably won’t receive any media attention is the good news that total US trade activity (Exports + Imports) set a record high in 2013, reflecting the improvement in both the US and world economies last year. Foreign consumers and producers purchased a record volume of “Made in the USA” exports, and American consumers, businesses and producers purchased a near record volume of “Made Outside the USA” imports, which is a positive sign of economic recovery and vibrancy both here and around the world.

You can see the original BEA report here

EIA Projects US Oil Production will increase toover 10 million barrels/day (mbd) in 2015. Perry notes that this level of production would match the previous high of US oil production in November 1970. As usual, Perry has a good graphic plotting US oil production from 1920 to EIAs projections for 2014 and 2015. One look at this graph should dispel any belief in so-called peak oil arguments.

Perry also notes that the BEA's data on exports shows that US exports of petroleum products (things like gasoline, diesel, jet fueling and heating oil) increased by 14% in 2013. The $82.9 billion in petroleum product exports in 2013 were about double the $41.9 (in inflation adjusted dollars) exported in 2008.

It should be pointed out that the increase in exports of petroleum products has little to do with the increase in US crude oil production. Instead, it has to do with the decline in demand for gasoline and other petroleum products which has left US refineries with excess capacity that can be exported, mainly to Latin American markets. The refineries along the Texas Gulf coast are a valuable source of US economic strength.

Unfortunately, Perry takes a somewhat partisan tone in his conclusion to this post. Perry notes that in 2010 President Obama promised to double US exports in 5 years, but probably won't extol the success of this industry due to a green bias. While I can't really disagree with the substance of his criticism, I like to keep at arms length from partisanship. I suppose that's a bias of its own kind.