It has been quite a while since the world last heard some good news on oil prices. In the space of a few weeks, crude prices have fallen by 20 per cent, to about $60 a barrel. Most will presume this development is positive for the world economy. On closer inspection, however, the news may signal a more disturbing event: an upcoming slowdown in economic activity across the industrialised world.

Only three years ago oil prices were hovering around the $30 mark. Since then, we have seen a steady increase in prices on the back of strong oil demand, a sluggish response in supply and the spike in prices caused by Hurricane Katrina this time last year. At its peak this August, crude oil was trading at just below $80 a barrel.