Oil down 1.4% after surprise supply increase

Crude-oil futures ended sharply lower on Thursday after a government weekly supply data showed a surprise increase in inventories.

Crude oil for February delivery fell $1.41, or 1.4%, to end the day at $101.81 a barrel on the New York Mercantile Exchange, ending a two-day winning streak for the commodity.

Losses intensified in the last hour of trading, but oil’s fate was sealed as soon as official word on supplies came in earlier Thursday. “It was an extremely bearish“ report, said Jim Ritterbusch, an oil analyst in Illinois.

A weaker euro, which pushed the U.S. dollar higher and kept pressure on dollar-denominated commodities, and weaker U.S. stocks despite positive jobs data also played a part.

The Energy Information Administration said crude-oil supplies rose 2.2 million barrels in the week ended Dec. 30. That compared to expectations of a decline of 450,000 barrels by analysts polled by Platts, and a decline of 4.4 million barrels shown by a trade group on Wednesday.

February gasoline settled 5 cents lower, or 1.8%, at $2.74 a gallon. Heating oil for the same month’s delivery fell 5 cents, or 1.7%, to $3.04 a gallon. These settlements snapped a four-day winning streak for both commodities.

Earlier Thursday, payrolls processing firm ADP said U.S. payrolls gained 325,000 jobs in December. Weekly jobless claims dropped 15,000 to 372,000 in the last week, the U.S. Labor Department said.

The stronger dollar kept contributing to oil’s weakness, however. The euro traded at a 15-month low on the concerns about the euro zone’s banks and a lukewarm reception for a French bond auction.

Oil had gained 4.4% over two sessions as Iran signaled it might close off passage through the Strait of Hormuz in retaliation for economic sanctions from the U.S. and Europe announced over the weekend.

Meanwhile, February natural gas declined 12 cents, or 3.8%, to $2.98 per million British thermal units. Natural gas has closed lower six of the past eight sessions.

The EIA also released Thursday a natural gas weekly inventories report, showing a decline of 76 billion cubic feet for the week ended Dec. 30. Analysts polled by Platts had expected a decline between 77 and 81 bcf.