Europe’s Energy trade deficit increased sharply

The euro zone’s energy trade deficit increased by 42 percent in the four months of 2008, as oil prices broke record after record as the deficit on energy products increased to 99.7 billion euros ($158 billion) from 70.4 billion euros this time last year.

European energy regulators have been promoting greater cross-border competition and transparency across Europe’s energy sector which should also help to create a more competitive market in order to help drive down prices.

It seems as though consolidation in the energy market and size is critical now in the face of soaring energy costs as Europe’s largest firms juggle for position.

Dominique Barbet, an economist at BNP Paribas SA in Paris, said that the full affect of the increase in prices of raw materials have not been fully realised and that it is likely that there will be another three or four months of an adverse impact on the trade figures.

According to Barbet, in the last 12 months euro zone imports on energy products have increased by 5 percent due to the increase in prices.

Economists has forecast an 800 million euro surplus for May, compared with an initial surplus of 2.2 euro billion back in April.

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