Oil prices fell toward $68 today and hit a six-week low as concern that inflation may slow economic growth encouraged selling across commodities markets.
US crude was trading 53 cents lower at $68 a barrel this afternoon, recovering some ground after touching its lowest since April 10th at $67.55. London Brent crude was down 34 cents at $68.34.
The drop added to a slide of nearly 5 per cent last week after signs that the record price of many raw materials was pushing up the cost of living and hitting consumers' pockets.
Rising inflation may force central banks to target higher interest rates, in turn slowing growth and cutting demand for commodities.
"This is a continuation of the bubble-bursting in commodities and energy markets last week," said Christopher Bellew of Bache Financial in London.
Other commodities also slipped early today, although they recovered some ground later in the day. Gold dipped 1 per cent, while silver was steady after earlier falling by as much as 3 per cent.
The fall was not limited to commodities. Inflation worries also hit equity indexes last week, and the FTSE 100 Index was down over 1 per cent today. Earlier today, it hit its lowest level since December.
Equity investors were looking to sell shares in mining and oil sector companies that have seen big gains with commodities.
Even with the fall today, however, oil is still some 11 per cent up on the year.