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.