Energy investors' fears about supply interruptions, along with rising demand, inflated oil prices artificially, leaving the commodity ripe for a pullback, analysts warned Tuesday. Amid fears that high fuel costs could douse the global economic recovery, oil prices tumbled more than 3 percent.

Shares of companies throughout the energy sector plunged with them. Uprisings in North Africa and the Middle East this spring sparked fears of tightening global supplies, pushing oil prices 33 percent higher since the middle of February.
Investors who drove that speculation might bail out in the coming months, causing prices to fall back toward $100 per barrel, Goldman Sachs analyst David Greely said in a research note Tuesday. There is plenty of spare oil stockpiled in the U.S., and oil-producing countries are operating below capacity, he said.
Benchmark West Texas Intermediate crude for May delivery dropped $3.71, or 3.4 percent, to $106.22 per barrel on the New York Mercantile Exchange, shedding nearly two weeks of price increases. At one point it dropped to $105.60. In London, Brent crude lost $3.47, or 2.8 percent, at $119.95 per barrel on the ICE Futures exchange.
Greely set a near-term price target of $105 per barrel for Brent crude and $99.50 for West Texas Immediate crude. He also withdrew a recommendation to buy contracts for delivery in March and April. Companies and investors should plan for lower prices when developing their hedging strategies, Greely said.
A separate report from the International Energy Agency projected that global oil demand will grow in 2011, but said that rising costs might cut into the world's appetite for crude.
""Preliminary January and February data suggest that persistently high oil prices may have already started to dent demand growth,"" the IEA said in its monthly oil market report.
The International Monetary Fund also announced lower growth forecasts for global demand Monday, saying high energy prices are a ""key downside risk.""
Much of the recent oil price run-up has been spurred by the fighting in Libya, which has taken almost all of the OPEC nation's 1.6 million barrels a day of crude production off the market indefinitely. On Monday, Libyan rebels rejected a cease-fire proposal by African mediators because it would leave longtime dictator Moammar Gadhafi in power.
However, no other country's oil supplies have been disrupted by the political uprisings in the Arab world this year, and some observers say the threat to supplies in the region has been overblown.
""While the market remains focused on the potential for further supply losses, we are becoming more concerned with the potential for a sharp decline in demand,"" Goldman's Greely said in the note.
In other Nymex trading for May contracts, natural gas fell 4 cents at $4.064 per 1,000 cubic feet.
The commodity action pulled shares of most energy-related companies lower Tuesday, by as much as 6 percent.
InterOil Corp., which explores for oil in the South Pacific, plunged $4.00, or 6 percent, to $65.21. Raymond James analysts downgraded the stock, to ""Market Perform"" from ""Outperform"" Tuesday, after the company postponed a key decision about which long-term projects it will pursue. The analysts saw few upcoming events to boost the stock's value.
Among exploration and production companies, shares of Anadarko Petroleum Corp. plummeted $3.13, or 4 percent, to $77.98. Newfield Exploration Co. decreased $2.86, or 4 percent, to $69.73. Shares of Devon Energy Corp. traded down $3.40, or 4 percent, to $85.84.
Gas producer Chesapeake Energy Corp. dropped $1.64, or 5 percent, to $31.70.
Among major, integrated oil producers, American Depository Receipts of BP PLC skidded $1.30, or 3 percent, to $45.37. Some foreign companies listed on U.S. exchanges trade in ADRs. ConocoPhillips shares dropped $3.07, or 4 percent, to $77.05. Marathon Oil Corp. was off $1.88, or 4 percent, to $49.89. Chevron lost $3.44, or 3 percent, to $104.34. Exxon Mobil Corp. sank $2.21, or 3 percent, to $82.95.
Among oil services firms, National-Oilwell Varco Inc. dropped $2.70, or 3 percent, to $74.81. FMC Technologies Inc. returned $1.52, or 3 percent, to $45.61. Halliburton Co. dove $1.64, or 3 percent, to $45.29. Baker Hughes Inc. declined $1.94, or 3 percent, to $67.37. Schlumberger Ltd. lost $2.36, or 3 percent, to $86.44.
(Source: businessweek.com)