* Oil flags after H1 star performance * Industrial metals also look overbought * Stock levels very high LONDON, July 13 - Commodities on Monday took their cue from weakened oil prices, around $60 a barrel, as the premature confidence of an early economic recovery that had boosted raw materials gave way to nervousness. One of the best performers of the commodity complex in the first half, oil rose by more than 60 percent from the end of December to hit a year high of $73.38 at the end of June. But last week, the market dropped by 11 percent in its biggest weekly decline since January. On Monday U.S. crude fell below $59 a barrel before climbing back up to $60.61, up 72 cents from Friday's close, by 1240 GMT. "Oil is definitely leading other commodities," said Eugen Weinberg of Commerzbank. "But you have to remember, it was one of the best performing commodities in the first half." Weinberg said industrial metals could be poised for the kind of correction experienced by the oil market and the Chinese buying that had sustained them was driven by stock-building rather than genuine demand. The domestic Chinese market faced the prospect of oversupply after its imports of copper in June hit a record for the fifth month in succession. Copper for three months delivery on the London Metal Exchange traded at $4,878.50 per tonne. After strong first-half gains, prices have shown signs of vulnerability, falling nearly 2 percent since the start of July. Aluminium eased by 0.63 percent to $1,566 per tonne, under pressure from record stocks of more than 4.4 million tonnes in London Metal Exchange warehouses. SWOLLEN STOCKS Stocks of most commodities are very high. U.S. fuel stocks have risen even though the peak demand driving season in the world's biggest energy consumer is well under way. U.S. government data last week pegged distillate stocks, including diesel, at a 25-year high and gasoline stocks were above last year's levels. Lawrence Eagles of JP Morgan said consumers had shown themselves to be more price conscious than in the past and oil above $70 a barrel had proved to be unsustainable as the economy remained fragile, he said. "The past few months have delivered a key message -- consumers are more sensitive to price than they were for the past five years," he said. Leading forecasters also issued bearish demand reports last week, including the Organization of the Petroleum Exporting Countries, which predicted consumption of its crude would not recover to last year's levels until around 2013. Oil and other commodities' descent from this year's peaks has coincided with negative economic data, which has also helped to drag down equities. World shares as measured by MSCI's all country index were 0.2 percent lower at 234.05 points by 1242 GMT after reaching its lowest since mid May on Monday. Another widely-watched gauge of economic activity, the Baltic Exchange's main sea freight index has dropped by around 30 percent since hitting 4,291 at the start of June, which was its highest for more than eight months. REGULATOR LOOMS The prospect of tougher regulation from U.S. regulator the Commodity Futures Trading Commission, which could have new rules in place by October or November, has further subdued activity across commodity markets. Open interest in most raw materials fell for a fourth straight week, data showed on Friday. Some of the investors fleeing riskier assets have made their way into the relative safety of the U.S. dollar, providing modest upward momentum. If extended more convincingly, it could add to the disincentives to invest in dollar-denominated commodities. On Monday, the dollar was virtually flat against a basket of commodities. Gold, often viewed as a substitute currency, was bid at $911.80 an ounce, down from $912.15 late in New York on Friday, and silver was bid at $12.53 per ounce, its weakest since early May.

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