Oil prices drop to lowest levels of the year

By CHRIS KAHN | May 23, 2012 | 11:38 AM EDT

NEW YORK (AP) — The price of oil is hitting new lows for the year as U.S. supplies grow.

Benchmark crude on Wednesday lost $1.23 to $90.62 in New York. It fell as low as $90.18 earlier in the day. Prices haven't been below the $90 mark since Nov. 1.

Prices dipped after the U.S. said oil supplies grew last week to the highest level since 1990.

Oil is also falling this month with the European economy slowing down, cutting into what's expected to be record growth in world demand. Analysts also say Iran may be allowed to keep supplying world oil markets this year as it negotiates with the West and eases concerns about its nuclear program.