NEW YORK (AP) – Oil prices tumbled 3 percent Thursday, as economists warned that the recent surge in fuel prices will eventually hurt the fragile economic recovery.

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 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."

Benchmark West Texas Intermediate for April delivery fell $3.06, about 3 percent, to $101.32 per barrel in midday trading on the New York Mercantile Exchange. In London, Brent crude lost $1.80 at $114.14 per barrel.

The economic news Thursday helped fuel the oil sell-off. China, which is expected to drive increases in oil demand for years to come in its growing economy, reported overnight that surging oil and commodity prices produced a surprising trade deficit of $7.3 billion for February. And the U.S. Labor Department reported that the number of people seeking unemployment benefits rose last week.

Oil prices started rising since late last year, as investors anticipated new tax cuts and gasoline demand increased. They soared above $100 per barrel last week as the Libyan uprising essentially shut down the country's exports.

"When you've risen as quickly as we have, there's always going to be a risk of a big drop when you hear stories that say the world isn't as wonderful as you think," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

The plunge in oil prices Thursday helped push oil company shares lower as well. Exxon Mobil Corp., Chevron Corp., BP, Total, ConocoPhillips, Occidental Petroleum Corp., and Royal Dutch Shell all fell 3 percent or more.

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 continue to worry about 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.

At the pump, retail gasoline prices added less than a penny on Thursday, rising to s national average of $3.529 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 41.2 cents more expensive than last month and 76.1 cents higher than the same time last year.

In other Nymex trading for April contracts, heating oil lost 6 cents at $3.0120 per gallon and gasoline gave up 5 cents at $2.9790 per gallon. Natural gas fell 11 cents to $3.820 per 1,000 cubic feet.