Crude Oil Drops Below $75 a Barrel

Oil prices dropped sharply Wednesday as fresh signs emerged of recessionary conditions and OPEC cut its forecast for demand.

Light, sweet crude declined by $4.09 to $74.54 a barrel in New York, and Brent crude fell $3.73 to $70.80 a barrel. The near-month crude contract has now fallen nearly 50% from its all-time high, reached in July.

Gasoline futures dropped 10 cents to $1.78 a gallon, and heating oil was lower by 7 cents at $2.19 a gallon.

The weakness came after OPEC cut its projections for 2008 and 2009 demand, citing the troubles plaguing financial markets and global economies.

On a day the stock market fell sharply, energy shares were no exception. Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks), ConocoPhillips (COP Quote - Cramer on COP - Stock Picks) and Chevron (CVX Quote - Cramer on CVX - Stock Picks) all had double-digit percentage losses.

Valero (VLO Quote - Cramer on VLO - Stock Picks) and Tesoro (TSO Quote - Cramer on TSO - Stock Picks) fell 20% and 18.6%, respectively.

The U.S. Oil (USO Quote - Cramer on USO - Stock Picks) ETF, which tracks crude prices, slid 6.6%.