Oil falls more than 2 percent on supply increase

NEW YORK (AP) — Oil prices dropped more than 2 percent after the government said U.S. crude supplies grew much more than expected last week.

The price of benchmark oil fell $2.13, or 2.3 percent, to $91.04 per barrel in New York. Brent crude fell $1.32 to $109.60 in London.

The Department of Energy reported an increase of 4.7 million barrels in the nation's storage tanks last week. Analysts expected supplies to grow by only 200,000 barrels, according to Platts, the energy-information arm of McGraw-Hill Cos.

For most of the year oil supplies fell in the U.S., as drivers and businesses burned less fuel and refineries cut their inventories to save money.

Last week crude oil imports increased as operations at many refineries picked up again after seasonal maintenance. Refineries operated at nearly 85 percent capacity last week, up almost 2 percentage points in a week.

Oil and gasoline demand is still down in the U.S., when compared with a year ago, the government said.