The price of oil has fallen to a five-year low after slowing manufacturing in China spooked investors already reeling from Opec’s decision not to cut production at a crucial meeting last week.

Brent crude fell more than $2 to below $68 a barrel continuing a run of five straight months of falling prices and dragging it down to a level not seen since the financial crisis. Meanwhile, US crude fell more than a dollar to $64.70 a barrel.

Oil prices have collapsed from a peak of $115 in June due to a glut in production sparked by slowing economic growth in China and the US shale boom.

Saudi Arabia blocked moves to cut production at a stormy meeting of the cartel in Vienna last week as it dug in against ceding further market share to the Americans.

Oil has lost 12 per cent of its price since that meeting and has been hit further by figures out today showing a slowdown in China’s manufacturing sector, a major importer of oil.

The purchasing managers’ index in the world’s second biggest economy eased to an eight-month low of 50.3 in November from 50.8 in October, China’s National Bureau of Statistics announced, below forecasts of 50.6 and marginally above the 50 mark which separates growth from contraction.

A separate index compiled by HSBC came in at 50, underlying the concerns.

The continued decline in oil prices has wiped millions of pounds off the price of companies exposed to the sector.

BHP Billiton was down 3.10 per cent to £14.69, BG Group 3.01 per cent to 873.20p and Tullow Oil down 6.47 per cent to 398.50p.

The price squeeze also pushed the rouble towards its biggest one-day fall since Russia’s financial crisis of 1998. The country is heavily reliant on oil and gas, with the sector making up about a third of exports and half of its revenues. Russia’s currency was down almost 4 per cent to more than 52 roubles against the dollar.

However, the fall in oil prices is good news for consumers, analysts have said, with shoppers having more disposable income for Christmas due to falling petrol prices.

The price of Brent crude later recovered some ground, trading down 0.76 per cent to $69.62.