Oil prices slid further on Thursday as the global credit crunch and fears for slowing energy demand took their toll, with prices now down about 50 percent from July's record highs.
In afternoon trade New York's main futures contract, light sweet crude for November delivery, dropped 2.39 dollars to 72.15 dollars a barrel.
It slid 4.09 dollars at the close of floor trading on Wednesday at the New York Mercantile Exchange.
Brent North Sea crude for November delivery eased 2.17 dollars to 68.63.
Brent settled down 3.73 dollars on Wednesday in London, and dropped below the 70-dollar level for the first time since June 2007 in electronic trading after the market closed.
Victor Shum, of Purvin and Gertz international energy consultancy in Singapore, said most commodities including oil were following stocks lower on fears for the global economy.
Japan's Nikkei stock index closed 11.41 percent lower Thursday, their biggest loss in two decades, while Seoul ended 9.4 percent lower and Hong Kong was down 7.6 percent.
"Everything is down," Shum said. "The fears about this global credit crisis leading to an extended economic slump, and perhaps a recession, really are causing investors to bail out of equities and also oil."
Oil prices have plunged from record highs above 147 dollars, reached in July, because of worries over demand in a slowing global economy.
The dramatic rise in oil prices was partly driven by a flow of investor funds.
With global credit lines now being squeezed, many investment funds that had big positions in oil are liquidating them to raise cash because of redemptions from clients, Shum said.
"The oil market is caught in the wake of four tsunamis: a global recession, tighter credit, increased refining capacity, and rising non-OPEC supplies -- all of which pressure the demand for OPEC crude," JPMorgan analyst Lawrence Eagles said in a report.
The Organisation of the Petroleum Exporting Countries (OPEC) on Wednesday cut its estimate for growth in demand for oil this year and in 2009 largely because of an "excessive" easing of demand in the United States.
For this year, the cartel cut its estimate for growth in demand to 550,000 barrels per day, giving average total demand of about 86.5 million bpd.
"The slow US economy is seen as the main cause of the sharp slowdown in petroleum product demand this year," OPEC said.
The cartel is to hold a special meeting on November 18 to discuss the global financial crisis and its impact on the oil market.
Several OPEC members have called for the meeting to cut output to shore up prices.
Shum said the oil market is waiting for further signals on what OPEC will do, and has not yet priced in any production cut.
"Until there are clear indications out of OPEC, I think we can expect more downward volatility," he said.
Traders were also waiting for the latest weekly snapshot of United States energy inventories due later Thursday for further clues about demand in the world's biggest energy consumer.