Further signs of economic slowdown emerged today with news of waning Chinese and US demand for oil and an OECD report that the outlook had taken a turn for the worse across the big industrialised countries.
The OECD said its monthly indicator of economic prospects fell in March in all of the Group of Seven powers - the United States, France, Germany, Italy, Britain, Canada and Japan.
"Slowing activity lies ahead in the OECD area according to the latest composite leading indicators," said the organisation, whose 30 countries account for about 80 per cent of world output.
Oil demand from China, Europe and US has fallen short of expectations in the first quarter of 2005, and the IEA's chief oil expert said this was probably due as much to slackening growth as prices still topping $50 a barrel.
Many economists believe the global economy has hit what they call a "soft patch" but that things are likely to pick up in the second half of the year again.
The world economy grew at its best rate in decades at 5.1 per cent last year and the International Monetary Fund said in April it expected the pace to ease to 4.3 per cent this year, with much of the drive coming from the developing world and Europe dragging its heels.
Confidence surveys and surveys of manufacturing activity in Europe took a turn for the worse as the second quarter of 2005 began, meaning that even a positive surprise forthcoming data would not be expected to change overall perceptions.
The European Commission is due to issue forecasts for second and third quarter growth tomorrow and recently cut its forecast for the year to 1.6 per cent from 2 per cent, which was the pace of growth in 2004 and about half of US levels.