WRAPUP 2-US trade gaps widens in April as oil prices surge

(Adds details, background)

By Doug Palmer

WASHINGTON, June 10 (Reuters) - The U.S. trade deficit widened more than expected in April as the price of imported oil hit a record, pushing overall imports to an all-time high, a Commerce Department report showed on Tuesday.

The monthly trade gap grew 7.8 percent to $60.9 billion, its biggest one-month gain since September 2005, despite a healthy rise in exports to a record $155.5 billion.

The wider deficit was due mostly to higher average prices for imported oil, which rose $6.96 per barrel in April to a record $96.81. Imports from Saudi Arabia, Venezuela and other members of the Organization of Petroleum Exporting Countries hit a record $20.9 billion.

Oil prices hit a record high near $140 per barrel on Friday, suggesting imported oil costs will continue to climb. Even so, trade is expected to remain a source of strength for the economy, which has been buffeted by a severe housing downturn and a credit crisis.

"We expect foreign trade to add more than 1 percentage point to GDP growth in the second quarter, a crucial contribution that helps keep overall growth just above zero," said Nigel Gault, chief economist at Global Insight.

Overall U.S. imports of goods and services reached a record $216.4 billion in April as they showed their biggest one-month gain since November 2002. Although oil accounted for much of the increase, imports of autos and capital goods bounced back after dropping in March.

Even with the run-up in oil prices, the U.S. trade deficit is $4 billion lower than it was in the first four months of 2007, U.S. Commerce Secretary Carlos Gutierrez noted in an interview.

"Without the impact of petroleum, the year-to-date deficit would have improved by over $50 billion. We're talking about one of the best eras we've ever had in our history for exports," Gutierrez said.

"Our net exports are actually adding more to our economy in the second quarter than in the first quarter," he said.

EXPORT STRENGTH

U.S. exports rebounded to a record $155.5 billion in April after retreating slightly in March. The month-to-month rise was the biggest in more than four years.

Exports of civilian aircraft, farm machinery and other capital goods "performed particularly well, up 15 percent from the comparable period of 2007," said Frank Vargo, vice president at the National Association of Manufacturers.

A weak dollar has helped push U.S. exports higher over the last several years, and has played a big role in keeping the U.S. economy afloat in recent months.

This week, China's ambassador to the World Trade Organization said the weak U.S. dollar was hurting developing countries by fueling increases in oil and food prices and he called on Washington to take quick action to stabilize its currency.