A surge of oil imports to beat next year's price increase may be causing a "bubble" in the U.S. trade deficits to be reported for November and December, according to an unpublished staff analysis at the Department of Commerce.
But top Treasury officials sharply disagree, seeing little cause to anticipate a November or December trade deficit significantly larger than October's.
The Commerce study, a copy of which was obtained by The Washington Post, says petroleum imports could increase in November and December by $400 million to $800 million per month, making the deficit in the range of $2.5 billion to $3 billion in each month, compared with $2.1 billion in October.
"If a larger deficit does occur during November and/or December," the report says, "it is important that administration officials not be surprised by it, and that they be prepared to explain this temporary depreciation in an informed manner."
It warns that if the big bulge takes place without adequate forewarning "there will be a high risk that the media and foreign exchange markets" will misinterpret a temporary reversal as being an end to an improvement that took place in the second quarter of the year.
Treasury officials, who had not seen the Commerce staff report, were dubious about its rationale when apprised of its contents.
They acknowledge that some anticipatory oil buying in advance of the Jan. 1 price increase was inevitable, but they said their projections had taken that into consideration.
As for the fact that the 14.49 percent price increase by the Organization of Petroleum Exporting Countries was larger than the generally anticipated 5 to 10 percent, they said that since it was announced Dec. 16, it surely could not have caused an unexpected "bubble" in November. It also came too late to do much harm in December, they said.
"Commerce has been wrong with these trade numbers before," said a man outside that agency. On the other hand, some officals think the "bubble" foreseen by Commerce might come next month if importers manage to get enough extra commitments on the books before the end of the year.
Some Commerce officials reportedly were opposed to publicizing the staff report, dated Dec. 20, fearing that the gloomy tidings might put extra pressure on the dollar.
The report concedes that a "bubble" in the trade deficit "is far from certain, and has only a 50 percent or less probability of occurring," because other trade movements might offset the bulge in oil imports.
But the authors of the report believe advance warning of a temporary deterioration in the trade statistics would take some of the sting out of effects on the markt if announced now. The trade figures for November are to be issued this week.
Administration officials have been predicting that the OPEC price increase would add about $3.5 billion to the trade deficit in 1979.Last week, Treasury Secretary W. Michael Blumenthal said this would result in a trade deficit of about $28.5 billion, compared with $35 billion estimated for this year.
But at the end of the week, government officials scaled back their forecasts for economic growth next year to barely over 2 percent, compared with a figure of about 2.5 percent being used in recent weeks.
In terms of the impact of slower growth on international accounts, Treasury officials now calculate that reduced imports of all kinds - because of the economic slowdown - will about offset the higher costs of OPEC oil. In that case, the trade deficit for 1979 would be about $25 billion.