From a record-high 147.27 dollars on July 11, the New York futures contract slid to about 115 dollars Friday, losing almost 22 percent in the course of four weeks.

In its wake, most other commodity prices, which were driven higher by the oil market surge, have fallen from their peaks: an ounce of gold has dropped to 800 dollars from 1,000; farm commodity prices are between 25 and 40 percent lower and gasoline prices have dropped about 6.0 percent.

"Oil is at a tipping point. It is an exaggeration to cry that a bubble has burst. It is a break," said Ellis Eckland, an independent analyst based in Chicago who insisted the "oil market was not in a bubble."

For James Williams at WTRG Energy, the law of supply and demand reins.

"The market is simple reflecting the fundamentals of supply and demand. Markets participants are considering the world slowdown, the deterioration in expectations for the growth worldwide," Williams said.

The slowdown in economic growth has a significant impact on energy consumption, analysts say.

Case in point: US drivers, known as huge consumers of gasoline, drove a third less in May compared with a year ago. Motor fuel consumption fell more than 2.0 percent.

This trend is expected to extend to the emerging market countries where the increasing weakening of fuel subsidies is going to force consumers to fill up their tanks less.

By contrast, petroleum inventories which had slumped early in the year, are rebuilding. The world's largest energy consumer, the United States, has witnessed an increase in its crude oil reserves in recent weeks.

"When investors realized how much demand was increasing, they bid up prices. and when they realized how much inflation was increasing ... they bid up prices further," said Daniel Katenberg, an analyst at Oppenheimer.

"Now growth rates are declining throughout the world, the market overreacts to that, too," he said.

Swept up in the record run-up of oil prices, analysts had revised upward their 2008 price forecasts, with some talking about 200 dollars a barrel in the next six months.

Those scenarios, disastrous for the world economy, have been replaced by a more modest range: between 80 and 110 dollars a barrel at the end of the year.

But a return to the forefront of problems with energy supplies could once again send prices skyward, analysts warn.

They point notably to the escalating tensions between the United States and Iran over Tehran's nuclear program, which could threaten overstretched global supplies, Antoine Halff of Newedge Group says.

Iran, the second-largest oil producer in the Organization of the Petroleum Exporting Countries, warned that it would shut the Strait of Hormuz, were 40 percent of the world's oil exports transit, if its interests are threatened.

The explosion of growth in the Chinese and Indian economies and a rebound in growth in the industrialized countries in 2009 could also stoke demand, pushing up prices.

"You should convince millions of Chinese and Indians, who are willing to live an American way of life, that they don't have to buy cars, they don't need (a) fridge," MF Global's John Kilduff joked.

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