January 12, 2016 4:05 pm
Updated: January 12, 2016 4:59 pm

Oil slips below US$30, joining loonie in hitting fresh historic lows

(Getty Images)

TORONTO — Crude oil briefly dipped below US$30 a barrel on Tuesday, hours after the Canadian dollar fell beneath the 70-cent U.S. mark.

At one point in early afternoon trading, a barrel of West Texas Intermediate — the benchmark oil price in North America — was trading for as low as US$29.93 before it regained some ground.

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The plunge coincided with the fall of the loonie, which for the first time in nearly 13 years fell below the 70-cent U.S. mark.

MORE: Oil slump enters ‘second round’ as downturn hits far beyond oil patch

Like oil, the currency’s value fluctuates on a second-by-second basis but fell to 69.89 cents U.S. before noon ET. It was the first time the loonie was below 70 cents U.S. since the spring of 2003, according to Bank of Canada data.

The loonie is heavily influenced by the global price for oil, one of the country’s major exports.

Oil’s fall

Oil prices have declined precipitously since early fall 2014 as over-production sent global reserves soaring, creating a glut that doesn’t appear to be going away soon.

“Oil prices remain the primary risk for the Canadian dollar, as they remain precariously low,” Rahim Madhavji, currency strategist at Knightsbridge Foreign Exchange, said.

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