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The Commodity Currency Plunge Is Making the Oil Crash Even Worse

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China, Commodities, Currencies Challenge Emerging Markets

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Crude bulls, stung by the worst July on record, should expect further pain as slumping commodity currencies cut production costs.

Drillers from Russia to Canada, the world’s second- and fourth-biggest oil producers, sell crude in U.S. dollars while paying most operating costs in local currencies. The Canadian dollar dropped to an 11-year low against its U.S. counterpart this month while the Russian ruble trades near a six-month low.