WASHINGTON (AP) â¿¿ Energy stocks tumbled Thursday along with oil prices after a month-long rally propelled by fears over unrest in the Mideast.

Prices have risen so fast this year, dragging gasoline prices higher as well, investors sold off futures contracts believing that the price of oil could damage a recovering but still weak economy.

Also Thursday, the government reported that the federal budget deficit hits all-time monthly high of $222.5 billion in February.

Industry experts say oil may have reached a level that initiated a sell-off of oil futures and energy company stocks with unemployment still high.

"People basically have black boxes or computer programs that see signals that say 'take your profits off the table,'" said Fadel Gheit, an energy analyst with Oppenheimer & Co.

Yet unsettling events in the Middle East continued to unfold Thursday, a reminder that further oils spikes are likely.

Saudi police opened fire at a rally in the kingdom's east in an apparent escalation of efforts to stop planned protests. A witness in the city of Qatif told The Associated Press that gunfire and stun grenades were fired at several hundred protesters marching in the streets. The person said it was the police.

Oil prices quickly bounced off their lows below $101, and in midafternoon trading were down only 1 percent. Benchmark crude was down 67 cents at $103.73 per barrel in trading on the New York Mercantile Exchange.

"Oil prices are inflated for the fundamental standpoint, and they will remain inflated because of the uncertainty, potential supply disruptions, and the stable regimes (in the Middle East) are not as stable as we think they are," Gheit said.

And so far fuel prices haven't slowed consumption, but economist Michael Lynch said drivers and businesses may start cutting back, if oil remains above the $100 per barrel level. The jump in oil has already pushed the average price of gasoline in the U.S. up by 46 cents a gallon this year, just as some workers who were laid off during the recession return to a daily commute.

"We're past the point of, 'Oh, it's only going to be up for a few days,'" Lynch said. "I think people are already starting to change their behavior, and they're modifying their vacation plans as we get closer to the summer."

Oil prices have risen since late last year and soared above $100 per barrel last week, with the uprising against Libyan leader Moammar Gadhafi ongoing.

The oil industry has tried to ease concerns recently, saying the rise in prices was mostly due to speculation and there's still plenty of crude to meet world demand. But investors question future supplies. Although Saudi Arabia and other OPEC members have said they will cover any shortfall from Libya, the wave of unrest in North Africa and the Middle East will make it harder to crank up production if another crisis affects shipments elsewhere, traders said.

Among top oil producers, shares were down as much as 4 percent. Exxon Mobil Corp. shares lost $2.17, or 3 percent, to $82.20. Chevron Corp. shares fell $3.59, or 4 percent, to $98.55. ConocoPhillips shares sank $2.65, or 3 percent, to $75.39. Shares of BP Plc, Royal Dutch Shell and other producers fell by similar amounts.

Among refiners, CFR Energy skidded 79 cents, or 4 percent, to $18.82. Tesoro Corp. fell 74 cents, or 3 percent, to $23.00. Frontier Oil Corp. dropped 63 cents, or 2 percent, to $25.17. Shares in Valero tumbled Thursday on reports that it would pay $2 billion for a refinery in the United Kingdom. Later in the day, Valero CEO Bill Klesse said those numbers were wrong.

Shares of oil services companies slid as well. Schlumberger Ltd. stock dipped $3.25, or 4 percent, to $85.30. National-Oilwell Varco Inc. lost $3.63, or 5 percent, to $74.69. Halliburton Co. decreased $1.22, or 3 percent, to $44.05.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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