Crude Follows Wall Street's Wild Ride

For the fourth quarter, the organization said its members would likely see a contraction of 1.4% on a year-on-year basis, with the U.S. down 2.8%, and Japan and the euro area 1.0% lower.

The latest forecasts were a sharp downgrade from June, when it forecast growth of 1.7% in 2009 and suggested the worst of the financial crisis may have passed.

Also on Thursday in Paris, the International Energy Agency slashed its demand forecast more than it has in a decade.

The agency now expects global oil demand to average 86.2 million barrels a day this year, nearly flat compared with 2007, and 86.5 million barrels a day next year. The cuts come on top of those already made in the IEA's October and September reports. Oil demand within the 30 OECD countries now is forecast to fall by 2.7% this year and by 1.6% in 2009, in the IEA's latest view.

The decline in prices also has battered the economy of several key oil-producing countries. Russia's equity markets have declined in lockstep with crude, with Urals blend oil -- the primary kind produced by Russia -- falling below $50 a barrel on Thursday. It was the lowest price for Urals blend since January 2007.

Prices at the pump continued to fall, dropping 2.4 cents overnight to $2.178, according to auto club AAA, the Oil Price Information Service and Wright Express.

Prices in some parts of the country were even lower, hitting $1.63 in Kansas City, Mo., and $1.74 in Tulsa, Okla., according to GasBuddy.com, which lets consumers post prices.