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The U.S. trade deficit widened much more than expected in July as average oil prices jumped to a record $124.66 per barrel and the volume of crude oil imports grew to the highest in four years, a U.S. Commerce Department report showed on Thursday.

The monthly trade gap swelled to $62.2 billion, the largest since March 2007, from an upwardly revised estimate of $58.84 billion in June. Wall Street analysts had forecast the deficit to expand to $58.0 billion from the original June tally of $56.8 billion.

As crude oil prices surged in July, the volume of oil imports jumped 15 percent to 342 million barrels, the highest since June 2004 even though prices were almost double the average of last July.

Total petroleum imports hit a record $51.4 billion, helping lift overall imports of goods and services 3.9 percent to a record $230.3 billion.

“The deficit increased quite a bit, but it is all in petroleum. There is a lagged effect from those price increases. We had a $6.3 billion jump in the cost of crude oil and that will certainly put a dent in your trade deficit,” said Kevin Logan, senior U.S quick payday loan. economist with Dresdner Kleinwort in New York.

A separate Labor Department report showed U.S. import prices fell 3.7 percent in August, the first decline since December as petroleum prices dropped 12.8 percent. The August oil price drop was the steepest since April 2003.

Imports of autos and consumer goods declined slightly in July and two other categories — food, feeds and beverages and capital goods — rose only slightly in a sign that the weak U.S. economy is crimping demand for foreign goods.

A second Labor Department report showed that the number of U.S. workers filing new claims for jobless benefits declined by 6,000 last week. But the number of people remaining on benefit rolls after an initial week of aid shot up by 122,000 to 3.53 million in the week ended August 30, the latest period for which data is available. 

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