Oil Erases Gains as Dollar Strengthens.

Oil prices fell Wednesday, erasing earlier gains, as a strong dollar outweighed signs of robust demand for refined products such as gasoline.

U.S. crude for June delivery settled down 12 cents, or 0.2%, at $48.19 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 35 cents, or 0.7%, to $48.93 a barrel on ICE Futures Europe.

Earlier in the session, prices were on track to settle at a new 2016 high.

Futures pared gains after minutes of the Federal Reserve’s April meeting indicated that the central bank could raise interest rates as soon as June, causing the dollar to jump. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, recently rose 0.7%. A stronger U.S. currency makes dollar-traded oil more expensive for foreign buyers.

Oil futures had surged in recent sessions as outages in Africa and Canada and production declines in the U.S. fueled expectations of a tighter supply. Some analysts warn that the price could be due for a pullback, as the market remains oversupplied.

“With oil now at almost $50/bbl., we feel that markets have moved too high, too far, too soon,” said analysts at BNP Paribas in a note. “The much-anticipated rebalancing of the market may take more time.”

Others disagree. U.S. crude-oil inventories unexpectedly rose by 1.3 million barrels to 541.3 million barrels in the week ended May 13, the Energy Information Administration said Wednesday. But stockpiles of refined products including gasoline and distillates such as diesel fuel fell by more than crude-oil inventories rose. Demand for refined products rose to more than 20 million barrels a day, the EIA estimated, the highest weekly level since January.

“We did have a hefty drawdown in gasoline and distillates,” said Peter Cardillo, chief market economist at First Standard Financial. “It’s going to support higher prices in the short term…I think $50 is around the corner.”

Gasoline futures settled up 1.48 cents, or 0.9%, to $1.6489 a gallon, the highest settlement since August. Diesel futures rose 1.57 cents, or 1.1%, to $1.4831 a gallon, the highest level since November.

Imports from Canada to the Midwest fell, reflecting lower Canadian oil-sands production following the wildfires there. But imports to the Gulf Coast rose by a larger amount, which “highlights the overall robust global supply picture,” said Kyle Cooper, analyst at IAF Advisors in Houston.

Production disruptions around the globe continue to be a driver for oil prices. Reports on Tuesday that the Canadian forest fires forced more oil-site evacuations were a bullish signal for traders, threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market.