Canada Trade Deficit Shrinks as Oil Firms Up

Canada's trade deficit in February unexpectedly shrank to C$984 million ($781 million) from C$1.48 billion in January as exporters benefited from stabilizing oil prices, Statistics Canada data indicated on Thursday.

The deficit was much smaller than the C$2.00 billion shortfall analysts had expected. Statscan revised January's deficit sharply down from an initial C$2.45 billion, citing updated figures for energy exports.

Crude prices roughly halved between June and January, cutting revenues of major energy-producing nations such as Canada. Oil prices began to recover in February, helping drive up the value of overall Canadian exports by 0.4 percent.

Exports of energy products jumped by 14.9 percent, reversing eight straight months of declines, on a 17.5 percent leap in prices. The month-on-month increase in energy prices was the largest since the 18.1 percent advance recorded in December 2000.

Overall imports fell by 0.7 percent as seven of the 11 subsectors declined. Imports of motor vehicles and parts dropped by 4.7 percent, while imports of industrial machinery, equipment and parts fell by 4.3 percent after hitting a record high in January.

Exports to the United States, which accounted for 75.3 percent of Canada's global total in February, rose by 1.1 percent, while imports fell by 1.2 percent. As a result, the trade surplus with the United States rose to C$2.95 billion from C$2.24 billion in January.

($1=$1.26 Canadian) (Reporting by David Ljunggren