Oil exchange traded funds were set for a lower open Friday as crude futures slipped below $80 a barrel on more signs the global economy is weakening.
U.S. Oil Fund (NYSEArca: USO) was off almost 2% in premarket action.
In New York, oil was poised for a fourth weekly drop while Brent traded at a record premium to U.S. prices, Bloomberg reported.
“There’s weakness across the Eurozone, and the possibility of a dip back into recession is now a material probability,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd., in the report.
“It is clear that deceleration in growth … seems to be gathering momentum and now spreading beyond Europe and the U.S.,” MF Global analysts wrote in a note to clients, according to a report from MarketWatch.
“But we think we will be able to avoid tipping into recession here in the U.S… The more energy prices go down, the more optimistic we get, as oil, more than any other commodity complex, has the capacity to perhaps single-handedly jump-start growth,” they said.
The oil ETF is down 18.7% year to date, according to investment researcher Morningstar.
