MercoPress. South Atlantic News Agency

Oil prices drops to 74.40 USD,lowest in over twelve months

Oil prices fell sharply on Wednesday as investors and officials said the global financial crisis could slash demand for energy. The price of crude oil for future delivery dropped more than 4 USD or more than 5%, to 74.50 USD a barrel during trading in New York.

Oil prices have now fallen almost 50% since hitting a record high of more than 147 USD a barrel in July. Prices are now at their lowest levels in more than a year. Meanwhile, a new survey, by MasterCard Spending Pulse, finds demand for gasoline in the US has fallen almost 10% compared to this time last year. On related news concerns that the financial crisis will cut oil demand led OPEC to slash its 2009 demand forecast for a second consecutive month. Wednesday's OPEC report says the financial turmoil is having a definite impact on economies around the world and slowing demand for oil, especially in the United States. The Organization of Petroleum Exporting Countries produces about 40% of the world's crude oil. OPEC officials are scheduled to meet next month, and OPEC President Chakib Khelil has anticipated production cuts are "very likely". Some OPEC members have been calling for production cuts to stabilize oil prices. Earlier this month, British Prime Minister Gordon Brown warned against any changes in production, saying any actions that could increase oil prices would be "wrong for the world economy".