The big slide in crude prices on Tuesday has weakened commodity currencies like the Australian dollar and the fresh wave of risk aversion has helped gold and yen rally while pushing equities lower.
Brent crude fell to a new five-year low on 9 December with the market seeing the problem of excess supply and lower demand persistent.
The 15 January Brent futures fell to as low as $65.33/barrel, its lowest since September 2009. The commodity had broken the $67.5 support with a 2.6% slide on Monday and hit the new low on Tuesday.
Crude prices have ended all the months since July lower and the lowest on Tuesday; the one-month Brent was down more than 40% from June close.
Brent prices are likely to remain around $65 a barrel for the next six to seven months until the global economy recovers or Opec changes its production policy, the head of Kuwait's state oil company said, according to a Reuters report.
The Australian dollar dropped to a new 4-1/2-year low of 0.8224 on Tuesday, making a 0.84% fall from Monday's close. Commodity exports account for more than 55% of Australia's total export value and 11% of GDP.
The slide in commodities also led to a wave of risk aversion pushing equity market indices lower across the globe. The Nikkei 225 fell 0.7% while the S&P 500 and Dow 30 futures are trading 0.25% and 0.6% lower.
Major eurozone and UK share indices such as Dax 30 and FTSE 100 fell more than 1% on Tuesday, tracking global cues.
Investors preferred gold and yen for safety to the US dollar given the greenback's sharp rally in the recent past. The USD index has fallen to as low as 88.73 on Tuesday, off 0.9% from the multi-year high of 89.55 touched in the previous day.
Gold and silver traded higher on the day with the yellow metal up 1.25% from Friday's close.
The Japanese yen was up more than 0.5% against the dollar, which has fallen against the euro and pound as well. The yen's gain has been broad-based as it has fallen more than 0.2% against the Korean won too.
The USD/JPY slipped to five-day low of 119.54, distancing it by 1.9% from the seven-year high of 121.85 touched on Monday.