WRAPUP 1-Low oil prices push up Canadian trade deficit to near record

Fri Mar 6, 2015 10:07am EST
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By David Ljunggren

OTTAWA, March 6 (Reuters) - Canada's trade deficit in January more than doubled to a near-record C$2.45 billion ($1.94 billion), Statistics Canada said on Friday, amid a slump in oil prices that has crimped the resource-dependent economy.

The deficit - considerably wider than the C$1 billion shortfall expected by analysts - was the second highest after the C$2.87 billion recorded in July 2012.

Crude prices have recently recovered a little after having dropped by around 50 percent since June, cutting revenues of major oil-producing nations such as Canada.

Exports fell by 2.8 percent as the value of energy shipments dropped 14.7 percent, the eighth consecutive monthly decrease. Export prices shrank by 1.5 percent and volumes dropped by 1.3 percent. Overall imports were flat.

"Energy prices retraced some losses in February, so this could be as bad as it get for trade, assuming oil prices don't fall further," BMO Capital Markets economist Benjamin Reitzes said in a note to clients.

The Canadian dollar hit its weakest level in nearly two weeks, trading at $1.2592 to the greenback, or 79.42 U.S. cents. This was softer than Thursday's finish at C$1.2506, or 79.96 U.S. cents.

In a sign of the damage done by lower oil prices, energy products accounted for 16.5 percent of all Canadian exports in January, sharply down from 26.6 percent in January 2014.

Statscan revised December's deficit to C$1.22 billion from an initial C$649 million.   Continued...