Crude oil exchange traded funds continue to weaken and traders are positioning for a slowdown, with Brent crude dipping below $100 for the first time since July, as the global economic engine slows.
The United States Brent Oil Fund (NYSEArca: BNO) is down 9.1% over the past month and the United States Oil Fund (NYSEArca: USO) has declined 6.3%. [Oil ETFs Fall as Crude Tests $90 a Barrel]
Brent futures briefly touched $98 a barrel after the International Monetary Fund cut its global outlook, reports Mark Shenk for Bloomberg.
The IMF reduced its 2013 global growth outlook by 0.2% to 3.3%, citing ongoing concerns in the Eurozone and weaker growth in the U.S. due to overly aggressive budget cuts, reports Annie Lowrey for the New York Times.
“Global prospects have improved again but the road to recovery in the advanced economies will remain bumpy,” according to the World Economic Outlook report. “Policy makers cannot afford to relax their efforts.”
Brent crude oil futures was trading around $99.6 a barrel at last check Tuesday, and West Texas Intermediate crude oil was hovering around $88.5 a barrel.
Futures also dipped Monday after China revealed a slower-than-expected economic expansion in the first quarter.
“Brent fell below $100 because of the economic outlook in Europe and China,” Bill O’Grady, chief market strategist at Confluence Investment Management, said in the Bloomberg article. “The picture in Europe looks horrible and the Chinese growth rate is slowing, which means oil demand isn’t going to rise as much as we expected.”
Looking ahead, oil traders are also anticipating higher U.S. crude oil supplies data on Wednesday for the past week.
United States Brent Oil Fund
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Max Chen contributed to this article.