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) - Get Report

,

ConocoPhillips

(COP) - Get Report

and

Chevron

(CVX) - Get Report

all had double-digit percentage losses.

Valero

(VLO) - Get Report

and

Tesoro

(TSO)

fell 20% and 18.6%, respectively.

The

U.S. Oil

(USO) - Get Report

ETF, which tracks crude prices, slid 6.6%.

This article was written by a staff member of TheStreet.com.