By Jeffry Bartash WASHINGTON (MarketWatch) - The U.S. trade deficit fell almost 21% in December to $38.5 billion, marking the biggest drop in four years, as exports rose and imports softened, the government said Friday. The decline in the trade gap, which touched its lowest level since January 2010, was led by a surge in U.S. oil exports and plunge in petroleum imports. The U.S. also exported more commercial jets. U.S. exports rose 2.1% in December to $186.4 billion, while imports declined 2.7% to $224.9 billion. It was the biggest pullback in imports in three years. The lower deficit was driven by a big reversal in the usual flow of petroleum. The U.S. exported a record $11.6 billion in petroleum products, but crude imports tumbled to the smallest amount since 1997. The switch appears to partly reflect the rising production of crude and refined oil in the U.S. as a result of new technologies that allow companies to extract previously inaccessible fuel in large rock formations. The U.S. has also become more efficient in its use of fuel, as reflected by the growing use of hybrid vehicles. In December, he U.S. deficit fell with most of the nation's biggest trading partners. The gap with China decreased to $24.5 billion from $29 billion in November, while the deficit with the European Union slid to $8.7 billion from $12.2 billion.

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