Oil prices fell sharply Tuesday on concerns that a slowing U.S. economy will decrease demand for oil.

The price of crude oil in New York at one point fell more than $9 a barrel in New York trading, the biggest one-day drop in dollar terms in 17 years. Oil later eased up from its low, but still closed down 4.5 percent at $138.69 a barrel.

Federal Reserve chairman Ben Bernanke warned lawmakers Tuesday that the U.S. economy faces the dual threat of slowing growth and inflation. Analysts say that points to lower U.S. demand for oil going forward.

Also Tuesday, Brazil's state-run oil company, Petrobras, said a strike by oil workers has had little effect on production, easing concerns about oil supplies.

Workers began a five-day strike Monday on rigs in Brazil's Campos Basin, but Petrobras said it brought in contingency teams to minimize the impact on production. The region accounts for 80 percent of Brazil's crude oil output.

Meanwhile, the OPEC oil cartel cut its forecast for global oil demand Tuesday due to faltering economic growth in industrialized nations and an increase in conservation measures.

OPEC predicted oil consumption will rise by just over one million barrels a day this year, 70,000 barrels a day less than initially forecast. The cartel says the drop in demand will be the biggest since 2002.

Oil prices hit a record high of $147.27 a barrel in New York on Friday.

Some information for this report was provided by AFP and AP.