UPDATE 5-Brent near 3-week low on China growth worries, dollar
* Brent sinks to lowest in three weeks
* Greenback hits 2-1/2 week high against major currencies
* Doubts over China demand growth
(Adds quotes, updates prices)
LONDON, June 24 (Reuters) - Brent crude traded near its lowest in three weeks after dropping below $100 on Monday as the dollar firmed and investors worried that a credit squeeze could dampen growth in China, the world's biggest energy user.
The international benchmark tumbled nearly 5 percent last week in its biggest weekly drop since early April after Federal Reserve Chairman Ben Bernanke laid out a strategy for paring monetary stimulus, broadly sapping demand for commodities.
"The U.S. Fed announcement has definitely changed the market sentiment for most global risk asset markets," said Dominick Chirichella of Energy Management Institute.
"On top of the concerns coming from the potential change in monetary policies in the developed world, China's worst cash crunch in the last 10 years is raising a new level of uncertainty in the world's main oil demand growth engine."
Brent crude was off 17 cents at $100.74 by 1159 GMT, after falling to $99.82 - its weakest since June 3. U.S. oil slipped 9 cents to $92.60 a barrel.
The stronger dollar hurts commodities priced in the greenback, including copper and gold, by making them more expensive for holders of other currencies.
U.S. oil is expected to revisit its April 18 low of $85.61 a barrel over the next three months, with a good chance of dropping through this level towards the June 28, 2012 trough of $77.28, according to Reuters market analyst Wang Tao.
The 3-month outlook on Brent shows a rapid drop to its June 22 low of $88.49 a barrel.
CHINA DEMAND WORRIES
A dimming outlook for oil demand growth in China, the world's second-largest economy, also dragged on prices.
A warning from the People's Bank of China (PBOC) that local banks needed to do a better job of managing their cash and lending saw Chinese shares suffer their biggest daily loss in nearly four years.
The PBOC has been allowing short-term rates to rise steeply in a bid to pressure the bank's to end the funding of speculative investments, but its efforts have raised fears about the impact on China's already slowing growth rate.
"Given the grave concerns about the Chinese economy, oil bulls are running for the exit," oil brokerage PVM said in a note to clients.
"This week has not started in an upbeat mood and the chances of further misery are a real possibility unless the Chinese central bank quickly intervenes."
Earlier this month, the International Energy Agency lowered its 2013 oil demand growth forecast for China to 3.8 percent from 3.9 percent.
(Additional reporting by Luke Pachymuthu in Singapore; Editing by Jeff Coelho)