* China factory activity shrinks, raising demand worries - PMI
* Coming up: final U.S. Markit Manufacturing PMI at 1258 GMT (Updates throughout, changes dateline, previous SINGAPORE)
By Christopher Johnson
LONDON, June 3 (Reuters) - Brent crude oil on Monday dipped below $100 a barrel for the first time in a month on demand worries after Chinese factory data pointed to slowing momentum in the world's second-biggest oil consumer.
The HSBC/Markit Purchasing Managers' Index (PMI) for China fell to 49.2 in May, showing a contraction in manufacturing for the first time in seven months as both domestic and external demand softened.
But losses were capped by supply worries after news Iran aims to start a nuclear reactor next year which the West fears could arm an atomic bomb.
Israel, which has bombed such sites before, may try to stop the plant being completed, a move that could trigger a wider conflict and jeopardise the security of Middle East oil supplies.
Brent crude futures fell 73 cents to a low of $99.66, its lowest since May 2, before recovering to trade around $100.30 by 0830 GMT. Brent is down around 16 percent from a year-high of $119.17 touched in February, and has fallen for four straight months.
U.S. oil dropped 20 cents to $91.77.
"Chinese data is weighing on prices," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. "There is plenty of oil in the market and no sign of more demand."
Ric Spooner, chief market analyst at CMC Markets, said the oil market remained "biased to further downside".
"We may see seasonal pick-up in demand, but if you look at the overall annual demand, there is more than enough supply to meet that," Spooner added.
DOWNTURN
The China figures add to recent evidence the country's economic growth is slowing. The official PMI for the non-manufacturing sector fell to 54.3 in May, the lowest since September last year. The Chinese government's official manufacturing PMI, released on Saturday, rose but remained close to 50.
Markit's Eurozone Manufacturing Purchasing Managers' Index showed on Monday a downturn in manufacturing eased last month but remained widespread as falling prices for factories' goods failed to drum up new business.
The slowing numbers followed a commitment on Friday by the Organization of the Petroleum Exporting Countries, which pumps a third of the world's oil, to keep its output target unchanged at 30 million barrels per day (bpd) for the rest of the year.
A Reuters poll forecast Brent will slip this year and next as uncertainty over Chinese growth and a gloomy European economic outlook depress demand while supplies improve. That will narrow its difference to the U.S. contract, likely to rise as a supply overhang in the Midwest of the United States clears.
Brent's premium to U.S. oil CL-LCO1=R is seen at $12.90 in 2013, falling to $9.60 in 2014, the poll showed. (Additional reporting by Manash Goswami in Singapore; editing by Keiron Henderson)
