The Indian rupee continued to lose ground versus the American greenback today after crashing through the 70-barrier yesterday when oil prices began to pick up pace. INR was trading at 70.5050 against the US dollar, according to data from Bloomberg at just after 2.00pm GMT, after closing the day yesterday at 70.4575. Monday marked the biggest loss registered in a single session since August for the crisis-hit currency. At its worst, the rupee lost about 14 percent of its value against the US dollar this year, making it the worst performing currency in Asia at the time.
As the value of the rupee depreciated, the price of oil soared this afternoon and added another 2 percent to this week’s 4 percent surge.
Benchmark Brent crude oil jumped by $1.89 to a high of $63.58 before easing back to trade around $63 by 12.40pm GMT.
US light crude was up $1 at $53.95 after earlier gaining more than 3 percent to an intraday high of $54.55.
India currently imports more than two-thirds of its oil needs.
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Oil prices had slumped after the Organization of the Petroleum Exporting Countries (OPEC) suggested cutting production in 2019 would be neccessary after a slowdown in demand sparked fears of an oil glut.
The OPEC is set to meet in Vienna, Austria, this Thursday where it is thought a deal will be thrashed out to reduce oil output by at least 1.3 million barrels per day.
Saudi Arabia, the organisations’s de facto leader, has indicated a need for steep reductions in output from January but has come under pressure from US President Donald Trump to help support the world economy with lower oil prices.
The Saudi and United Arab Emirates energy ministers, Khalid al-Falih and Suhail bin Mohammed al-Mazroui, said on Tuesday that an adjustment in global oil output was required but all producers must be on board.
Mr al-Falih told Bloomberg television: “The next road to cross is whether all countries are willing to come on board and contribute to that cut.”
Russia resistance to a major cut in oil production has proven to be the main point of contention so far for the OPEC.
Sources in Moscow have suggested Russia could contribute some 140,000 barrels per day to a reduction.
This is a far cry from the 250,000-300,000 barrels per day Middle East-dominated OPEC members have insisted Russia cut.
It has been suggested the OPEC could delay a decision to cut if the main criteria such as Russia’s involvement were not met, even though doing so would mean a further fall in prices.
One source told Reuters: “OPEC can always meet again in February, for example, and decide on a cut then.
“Those who were not able or willing to cooperate will be wanting to cut then.”