(Adds comment, updates prices)
By Henning Gloystein and Keith Wallis
SINGAPORE, May 19 (Reuters) - Oil prices fell on Thursday,
pulled down by rising U.S. crude inventories, a stronger dollar
and surging output from Iran to Europe and Asia.
Brent crude futures LCOc1 were down 80 cents, or 1.6
percent from their last settlement, trading at $48.13 per barrel
at 0643 GMT.
The benchmark dropped briefly below $48 a barrel earlier in
the session.
U.S. crude futures CLc1 were down 63 cents, or 1.3
percent, at $47.56 a barrel.
"The mid-session falls were more of a reaction to the
strength of the U.S. dollar," said Jonathan Barratt, chief
investment officer at Sydney's Ayers Alliance.
The dollar index .DXY broke a seven-week high, hitting
95.33, earlier in the session on Thursday before slipping.
A stronger greenback makes dollar commodities including oil
more expensive for holders of other currencies.
Both oil contracts broke 2016 highs earlier in the week on
the back of output cuts across the Americas, in Africa and also
in Asia.
But the bull-run ended after the U.S. Energy Information
Administration (EIA) published data showing an unexpected 1.31
million barrel rise in U.S. crude stocks to 541.29 million
barrels C-STK-T-EIA .
"We suspect the oil market has moved too high, too far, too
soon," French bank BNP Paribas (PA:BNPP) said.
The inventory build came despite another fall in U.S. crude
oil production to 8.79 million barrels per day (bpd)
C-OUT-T-EIA , down from a peak of over 9.6 million bpd last
year.
Despite this, analysts said oil was being pushed lower by
the minutes of the Fed's April 26-27 policy meeting which showed
the central bank was likely to raise rates in June if economic
data pointed to stronger second-quarter growth, driving up the
dollar.
Since oil is traded in dollar, a stronger greenback makes
fuel purchases for countries that use other currencies more
expensive, potentially denting demand.
After falling by almost 8 percent against a basket of other
currencies .DXY between January and April, the dollar has
since recovered 3.5 percent, weighing on oil.
Surging oil exports from Iran after sanctions against it
were lifted in January also dragged.
Iran's oil exports are set to jump nearly 60 percent in May
from a year ago to 2.1 million bpd. The rises suggest that the
country's logistical problems following years of sanctions have
been overcome or were less severe than thought.
Despite Thursday's price falls, analysts said that global
supply disruptions still loomed.
ANZ bank said that almost 2.5 million barrels of daily oil
production has been lost since the start of the year, and that
further cuts were likely.
"The situation in Venezuela looks particularly bleak," the
bank said, adding that the country's oil exports had fallen from
2.4 million bpd at the end of 2015 to 2.15 million bpd in April.
"We suspect the nation's recent issues could see this fall
below 2 million bpd in May," ANZ said.
Overall, traders said that global oil markets would likely
remain in a slight production surplus of between 0.1 and 1
million bpd this year, compared with a glut of as much as 2.5
million bpd in 2015.
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GRAPHIC on Asia's Iranian crude oil imports http://graphics.thomsonreuters.com/iran-oil/index.html
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