Oil prices may be scary, but lower consumption means no need to panic.

FOR a world that runs on oil, it was a summer to incite panic.

The price of crude oil for future delivery in New York jumped by about a third in July and August, flirting with the $50-a-barrel mark. U.S. gasoline prices at the pump averaged about $1.90 a gallon. Global demand for oil, notably in surging economies like China and India, wouldn't let up, forcing producers to open their spigots. Speculators bet that violence in Iraq would stop the flow of crude. Stock prices dropped, as investors figured high energy costs might depress profits.

History tells us the worry was for nothing. Still is.

Oil prices, which passed a record $50 a barrel and then retreated, have soared before, often causing recessions. The world's economies always bounced back. Consumers cut energy use, more oil was produced in safer places--and crude prices plummeted. The globe is better braced for the shock this time.

Economists do say that expensive oil will hurt. Investment bank Lehman Brothers Holdings Inc., for instance, pared its estimate for growth in U.S. gross domestic product in the second half to 3.5 percent from 4.5 percent. The lower number still indicates a vibrant economy that's benefiting from historically low interest rates.

Some perspective: The New York-based Economic Cycle Research Institute said that the inflation-adjusted price of Saudi Arabian light crude, once the world benchmark, is around $39 a barrel, far below its record of $77.86 way back in 1981.

Bear Stearns Cos. said in August that New York crude might fall to the neighborhood of $25 next year. That might be too optimistic. The problem is different this time, said Larry Goldstein, president of the Petroleum Industry Research Foundation, which the oil industry funds. He points out that past oil shocks were triggered by events such as the 1973 Arab oil embargo and the 1979 Iranian revolution--while today capacity is reaching its limits. "This one is structural in nature; the others were exogenous," Goldstein said.

The past tells us the market will adjust again if crude stays north of, say, $30 a barrel. U.S. industrial use of energy, including natural gas and coal, peaked in 1973 and again in 1979, only to fall until 1995, when it started to rise again. Companies will switch to cheaper fuel and buy more-energy-efficient machinery. Airlines have already reduced flight speeds to save fuel, and Boeing Co. hopes its 7E7 jet, due in 2008, will use 20 percent less fuel than similar-size current planes.

Combating high oil prices, the U.S. government increased the fuel economy of passenger cars to 21.9 miles per gallon in 2000 from 13.4 miles per gallon in 1973. The craze for minivans, light trucks and sport utility vehicles is holding the efficiency of all vehicles at about 17 miles per gallon--offering an obvious target for future saving.

Oil worrywarts follow the wrong money. Big oil companies such as Exxon Mobil Corp. and ChevronTexaco Corp. are increasing their exploration for oil at a methodical rather than frantic pace. And they have no plan for a new U.S. refinery, though the last major one opened in 1976 and U.S. refiners last year produced just 2.68 percent more oil products than they did in 1998. Would they be so nonchalant if they thought high-priced crude were here to stay?

David Pauly is a columnist for Bloomberg News.