Calls are growing louder that oil prices are set to decline some more and although the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, is up 6.6% over the past 90 days, a case can be made that crude is set for some near-term retrenchment.

That would be good news for the U.S. Global Jets ETF (NYSEArca: JETS), the only dedicated airline exchange traded fund available on U.S. exchanges. Admittedly, the assessment that JETS should benefit from oil’s woes is not surprising. After all, fuel is the largest input cost for airlines. [New Airline ETF Takes Off]

Interestingly, JETS’ 4.8% one-month loss is notably worse than the almost 3% shed by USO over the same period, but some analysts do not see that condition persisting and are bullish on some JETS holdings on the basis that there is more downside ahead for crude prices.

“We note that speculative positions in oil are excessive and appear to have peaked. Ordinarily, this leads to a fall in the oil price. Additionally, if the oil price rose significantly from here it would threaten Saudi Arabia’s market share strategy (which it implemented at an $80p/b oil price) especially with shale capex being switched back on at $65p/b. Since 1860, bear markets in oil have lasted 11 to 28 years, not 7 years. The recent strength in the dollar points to a weaker oil price, tactically. Credit Suisse’s house view is that oil prices will weaken in the near-term, before rising to $71p/b in Q4,” according to a Credit Suisse note posted by Ben Levisohn for Barron’s.

Here is the good news for the newly minted JETS in the weak oil scenario: “US airlines are very oil sensitive (10% off the oil price has historically led to 14% outperformance), are cheap on P/E relatives and oversold. Capital discipline still looks reasonable (with capex to sales still at the low end of its historical range),” notes Credit Suisse.

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