* Dollar erases early rise against the euro * API oil data showed unexpected crude supply drop NEW YORK, Jan 21 (Reuters) - U.S. crude oil handed back its early gains Thursday ahead of a government oil inventory report as it seesawed with the dollar amid support from industry data showing crude supplies fell last week against forecasts for a rise. "Looks like the dollar pared its gain against the euro and the traders seemed to have ignored the jobless claims number," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut. The dollar returned to flat against the euro after the jobless claims data, but earlier the euro fell to its weakest level against the greenback in nearly six months on concerns over Greece and other peripheral euro zone countries. [USD/] The number of U.S. workers filing new applications for unemployment insurance unexpectedly rose last week, rising for a third straight week. [ID:nN21208641] The American Petroleum Institute on Tuesday reported crude inventories fell 1.8 million barrels last week. [API/S] Distillate stocks fell 3.4 million barrels, with heating oil stocks having fallen 2.4 million barrels, the API said. The API said gasoline stocks rose only 667,000 barrels. The U.S. Energy Information Administration will report oil inventory data at 11 a.m. EST (1600 GMT), after releasing natural gas data at 10:30 a.m. EST. The oil report was delayed a day due to Monday's U.S. holiday. A Reuters analyst survey on Tuesday forecast crude supplies to be up 2.4 million barrels, with distillates seen down only 100,000 barrels and gasoline stocks up 1.7 million. Expectations were for natural gas storage to be down 229 billion cubic feet. [ID:nN20162926] PRICES * On the New York Mercantile Exchange at 9:48 a.m. EST (1458 GMT), March crude CLH0 was up 26 cents, or 0.33 percent, at $78 a barrel, trading from $78.36 to $77.32. * The NYMEX February crude contract expired on Wednesday, going off the board at $77.62 a barrel, down $1.40 on the day. * In London, March Brent crude LCOH0 rose 21 cents, or 0.28 percent, to $76.53 a barrel, trading from $75.76 to $76.82. * NYMEX February RBOB RBG0 rose 1.71 cents, or 0.84 percent, to $2.0635 a gallon, trading from $2.0354 to $2.0689. * NYMEX February heating oil HOG0 rose 1.09 cents, or 0.54 percent, to $2.0320 a gallon, trading from $2.0142 to $2.0351. * The March/March heating oil crack spread <0#CL-HO=R> was at $7.72, after ending at $7.70 on Wednesday. The March/March RBOB crack spread <0#RB-CL=R> was at $8.97, after ending at $8.68 on Wednesday. * The spread between the current front month and the five-year forward crude contract CLc61 was at $13.94, based on the March 2015 contract Wednesday settlement at $91.94. The spread ended Wednesday at $14.20. TECHNICALS NYMEX crude 10-day/20-day moving average: $79.54/$79.77 Technical support/resistance: NYMEX crude: $76.57/$78.88 NYMEX heating oil: $1.9916/$2.0060 NYMEX RBOB: $2.0211/$2.0719 For a full report on technicals, click on [ID:nLDE60J1TI] MARKET NEWS * A fire at an oil storage tank in Cushing, Oklahoma, was extinguished, a local fireman said. Traders said the fire started Wednesday night. [ID:nN21207228] * Strong El Nino weather will persist into early spring, affecting U.S. weather into the April-June period, the U.S. National Weather Service said. [ID:nWNA2227] (Reporting by Robert Gibbons; Editing by John Picinich)

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