Oil Prices at Lowest Point in 5 1/2 YearsAuthor: Don MillerLast Updated: December 16, 2014 For the first time in over five and a half years, oil prices dropped over 2% causing increasing concerns of slower global growth and flood of supply, as well as fueling fears for producers of commodities and energy, as well as exporters.After shares in the United States posted the biggest weekly decline in two and one half years last week specific to losses, with the energy sector in the lead, investors became extremely nervous. Investors also anticipate that interest rates will increase sooner than later based on a hint by the Federal Reserve Bank.At one point, futures for US crude oil prices dropped over 2.5%, hitting as low as $56.25 per barrel and even after declining nearly 50% from the peak in June there are no signs of improvement.In last week’s forecast, the world’s energy watchdog expected rates to drop even lower in 2015 based on increased supply and less demand. With this, a wave a new selling began. The ongoing slide of oil prices hit currencies and energy stocks hard while exposing exports for crude on Friday that stifled interest in riskier assets.For Asia-Pacific shares outside of Japan, according to the MSCI’s broadcast index they hit their lowest since March after falling 0.5% in early trade, this as resource-heavy shares in Australia dropped 1%.Dropping 0.7% was Japan’s Nikkei share, which got momentum following the huge election victory by the country’s Prime Minister Shinzo Abe. In turn, this game reflationary economic policies a significant boost.Strained were currencies from the energy-exporting emerging market while currency in Brazil reached a nine and one half year low and Russia, a double-hitting historic low.The Australian dollar hit $0.8215, a 0.2% drop, getting closer to last week’s low in four and a half years of $0.8204. So far, an Islamic militant hostage situation that forced police to lock down the country’s financial district and central bank there has been little impact on the currency.Declining prices for risk asset are driving investors toward government debt and other more traditional safe havens deemed safe to include the Japanese yen.To the yen, the US dollar dropped to a low of 117.78, edging closer to last week’s low of 117.445. However, after the Bank of Japan tankan corporate sentiment survey revealed business reaction to December’s decline for big manufacturers, the yen cut gains, down 0.3% and standing at 118.50.Against six other major currencies, the dollar index dropped roughly 0.2% to 88.169, moving away even further from last week’s five and a half year high of 89.550.In the next few days, the risk-off attitude might lend support to the Japanese yen against the US dollar. However, as stated by Osao Iizuka, chief dealer at Sumitomo Mitsui Trust Bank, on the dollar the market will likely become bullish after the Federal Reserve’s meeting.Another gain was seen with US Treasuries as the 10-year yield fell 2.071%, a two-month low. In the meantime, economic data for the US is improving after added to bets that next year, the Federal Reserve Bank will increase interest rates.The US central bank is expected by many investors to change its promise to keep interest rates close to zero for what has been said as a “consideration time” when starting on Tuesday, it meets for a meeting on policy that will stretch over a two-day period.