* Labour market lacks vigour for Fed to scale back stimulus * U.S. dollar nurses heavy losses after fierce overnight sell-off * New outage at North Sea Buzzard oilfield * Coming Up: U.S. Non-farm payrolls; 1230 GMT (Updates prices) By Manash Goswami SINGAPORE, June 7 (Reuters) - Brent futures posted light gains to hold above $103 a barrel on Friday, supported by a sharp fall in the dollar and expectations of ongoing U.S. economic stimulus, setting the contract on course for its biggest weekly gain since late April. All eyes are on U.S. employment data due later to gauge the health of the world's biggest economy. Initial job numbers on Thursday pointed to a moderate growth, but were likely not strong enough to convince the Fed to scale back the amount of cash it is pumping into the banking system. Crude got further support from a report showing a drawdown in U.S. oil stocks. Brent crude gained 21 cents to $103.82 a barrel by 0623 GMT, while U.S. oil rose 18 cents to $94.94. Both contracts are set for their biggest weekly gain since the week ended April 26, with the European benchmark poised to rise 3.4 percent and its U.S. counterpart 3.2 percent. "Investors should look at dollar trades more than supply-demand factors for oil," said Tetsu Emori, a commodity fund manager with Astmax Investments in Tokyo. "On the oil fundamentals side as well the news has been good as we have seen inventories come off, while geopolitical worries linger." For Brent, $100 is a key support level and $105 an important psychological resistance, Emori said. The trading range for U.S. oil will be between $93 and $95 a barrel, with $98 providing the next major resistance, he said. A drop in the U.S. currency supported oil with the dollar index hitting three-month lows in the previous session and remaining weak in Asian trade. A soft dollar makes commodities priced in the greenback cheaper for holders of other currencies. "In the long-term I agree that the dollar will strengthen as the Fed eventually rolls back stimulus, but for now the dollar seems overbought and we are seeing some unwinding of positions," Emori said. DEMAND OUTLOOK The Fed's policy-setting committee meets June 18-19. With data ranging from manufacturing to consumer spending showing the economy hit a soft patch early in the second quarter, it is unlikely the U.S. central bank will announce a tapering of the $85 billion in bonds it is buying each month at that meeting. Brent was also supported by news that the Buzzard oilfield in the UK North Sea has suffered a production outage, the second in less than a week. The field's normal production is about 200,000 barrels per day. News of a fall in U.S. oil inventories also supported prices, particularly the U.S. benchmark. Crude inventories at the Cushing, Oklahoma, oil hub declined more than 1 million barrels between May 31 and June 4, energy industry intelligence service Genscape reported. (Reporting by Manash Goswami; Editing by Ed Davies and Chris Gallagher)

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