Oil prices dropped by $4 today, adding to a decline of more than 10% from last week's record on worries over US demand and easing political tensions between Iran and the West over its nuclear programme.
Oil's slide marks the biggest three-day loss in the market in percentage terms since December 2004, a boon to world stock markets that have been hard-hit in recent months by mounting fears over inflation and the health of the banking sector.
US crude fell $4 to $130.60 a barrel this evening, adding to more than $10 of losses over the previous two days that have brought prices further from Friday's all-time peak of $147.27 a barrel. London Brent crude fell $1.94 to $133.87 a barrel.
Despite the losses, oil prices remain up about 30% this year, driven in part by surging demand from developing economies in Asia and worries that world production growth won't be able to keep pace.
Dealers said the bulk of the downward push on crude oil in recent days has been concern that economic trouble in the US was cutting deeply into demand for fuel in the world's biggest energy consumer.
A US government report earlier this week showed that US oil product demand over the past four weeks running 2% below a year ago in a sign soaring pump prices were hitting consumption.
Dealers added that apparent easing tensions between the US and Iran over its nuclear programme have reduced some of the geopolitical risk premium in the oil market.
However, today's losses were limited by fresh supply disruptions in Nigeria and Canada that together pulled nearly 200,000 barrels per day off the market - the equivalent of a large oil field in the Gulf of Mexico.
