By Henning Gloystein and Keith Wallis
SINGAPORE (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
"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)
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.