Crude oil prices fell below $120 a barrel for the first time in three months yesterday amid mounting worries about slowing economic growth and signs of rising supplies from Opec, the oil exporting countries cartel.

The fall in oil prices and other commodities – such as copper, which yesterday hit a six-month low – will be welcomed by central bankers confronting increasing inflationary pressures and slower growth.

The central banks of the US, Eurozone and UK meet this week to consider interest rate policy in the face of slowing growth and rising inflation, caused in part by soaring oil prices.

Further evidence of rising inflationary pressure came in data released yesterday in both the US and Europe. However the US Federal Reserve, which meets today, and the European Central Bank and Bank of England, which meet on Thursday, are all expected to keep rates on hold.

In New York, West Texas Intermediate oil futures plunged more than $5 to an intraday low of $119.5 a barrel, sending the Reuters-Jefferies CRB index, a global commodities benchmark, to its lowest in since early May.

Michael Wittner, of Société Générale, said prices were being affected by concerns that a slowing global economy was dampening demand for fuel. “US oil demand won’t recover soon.”

Some traders also expressed doubts about the strength of Chinese oil consumption, long seen as the main cause of higher prices, saying it had been artificially boosted by stockpiling ahead of the Olympics.

Higher supplies from Opec, mainly thanks to Saudi Arabia’s decision to boost its oil production to highest level in more than 25 years, pushed prices down.

Traders warned against calling the end of high oil prices, since prices have oscillated between $130 and $120 for the past 10 days without a clear trend emerging. In afternoon trading yesterday, prices recovered from the day’s lows to $121.25 a barrel.