Canada's benchmark stock index and currency were both lower on Tuesday as oil dipped back below $30 per barrel as hopes of a production cut were further dashed.

The price of the main oil contract was down $1.74 at $29.88 US when trading finished on Tuesday afternoon. On Monday, oil lost almost six per cent and was trading near $34 when the week started.

That's the worst two-day streak for oil, in percentage terms, since 2011.

"Hope is extinguished for now, as the now two-day fall in crude has regained the market's focus," wrote John Briggs, head of Americas fixed income strategy at RBS, in a note to investors.

oil crude shale pumpjack bakken

Oil has shed almost 10 per cent of its value in two days as hopes are being dashed that major oil exporters will agree to a production cut. (Matthew Staver/Bloomberg)

The sell-off in crude was sparked by numbers from Russia showing the country continues to pump out more oil, even as it tries to convince OPEC to cut production. Russia produced 10.88 million barrels per day of oil in January, up from 10.83 million in December, data from the country's energy ministry showed on Tuesday.

Goldman Sachs said it was "highly unlikely" the Organization of the Petroleum Exporting Countries would cooperate with Russia to cut output, saying such a move would also be self-defeating as stronger prices would bring previously shelved production back to the market.

"It's hard to see a successful agreement between OPEC and Russia to cut production and people are starting to see that," said Andy Sommer, senior energy analyst at Axpo Trading in Dietikon, Switzerland.

Especially since any cut by OPEC would immediately benefit U.S. shale producers, the people whom the Saudi-led cartel have been trying to drown out for more than a year.

Oil's weakness spread to the loonie, which shed half a cent to close at 71.29 cents US. And the TSX was also waylaid by oil, losing more than 232 points, or 1.8 per cent, to close at 12,442.

In New York, the Dow Jones industrial average lost 295 points to 16,154. The Standard & Poor's 500 index lost 36 points to 1,903 and the Nasdaq composite fell 104 points to 4,515.

With files from Reuters