Brent regains ground after slide as dollar slips from peak

By Manolo Serapio Jr

MANILA (Reuters) - Brent crude rose on Monday, recovering from a three-day decline, as the dollar moved away from last week's peak that was spurred by expectations the U.S. Federal Reserve was on track to raise interest rates this year after robust employment data.

The dollar eased about 0.2 percent versus a basket of currencies, after hitting its loftiest in almost seven months on Friday following data showing U.S. nonfarm payrolls jumped 271,000 in October, far exceeding the 180,000 increase that economists polled by Reuters had predicted.

But the dollar's strength is likely to persist ahead of a likely rate increase by the Federal Reserve in December, and could be a key drag on prices of oil and other commodities, said Ben Le Brun, market analyst at OptionsXpress in Sydney.

A stronger greenback makes dollar-priced assets more costly for buyers using other currencies.

On the other hand, "the U.S. economy is running on its own steam now and in a position where the Federal Reserve deems that a small interest rate hike is not going to damage confidence in the economy," said Le Brun.

"That should be a positive in terms of demand for crude."

Brent crude for December delivery was up 49 cents at $47.91 a barrel by 0623 GMT, after falling more than 1 percent on Friday.

December U.S. crude gained 42 cents to $44.71 a barrel after touching a 1-1/2-week low of $43.83.

Hedge funds raised their bullish wagers on U.S. crude last week by the most in six months, data showed on Friday, as speculators bought into oil contracts in forward months on bets that market fundamentals will take time to improve.

Weekend data from China, the world's No.2 oil consumer, showed the country's crude oil imports fell 5.7 percent from the previous month to 26.35 million tonnes in October.

But while China's crude imports dropped to 6.2 million barrels per day (bpd) from 6.8 million bpd from September, the volume was still up 9.4 percent from a year ago and 8.9 percent higher in January-October.

"Chinese demand for crude oil will counter the downturn in demand as refiners in the northern hemisphere go through autumn maintenance and reduce their crude purchases," BMI Research said in a note.

"Available data indicates that this maintenance season will be shorter than previous years ... as refiners are keen for facilities to be turned around quickly while crack spreads remain high."

(Reporting by Manolo Serapio Jr.; Editing by Himani Sarkar)