NEW YORK (AP) — The price of oil is falling after the U.S. reported a surprise increase in supplies.

Benchmark U.S. crude fell by $1.20 to $87.30 per barrel in New York while Brent crude lost 76 cents to $102.66 per barrel in London.

Prices dropped after the Energy Information Administration reported that the nation's crude supply grew by 2.7 million barrels last week. Analysts were expecting supplies to fall by 250,000 barrels, according to a survey by Platts, the energy-information arm of McGraw Hill.

U.S. crude supplies have grown this year to the highest levels since 1990.

Meanwhile retail gasoline increased by nearly a penny to a national average of $3.485 per gallon.