UPDATE 4-Oil rises above $103 on manufacturing PMIs, Fed
* Euro zone manufacturing PMIs more encouraging
* China PMI slows in June, new orders fall for Indian producers
* Official Chinese PMI still shows manufacturing growth
* Fed may scale back bond-buying programme in Sept policy meeting
* Coming up: U.S. ISM Manufacturing PMI for June at 1400 GMT
(Updates prices; paragraphs 5, 7)
LONDON, July 1 (Reuters) - Brent crude oil rose above $103 a barrel on Monday as more encouraging data from Europe and better-than-expected official manufacturing figures from China balanced uncertainty over the outlook for U.S. monetary policy.
A key survey of euro zone manufacturing suggested on Monday that the bloc's economy had stabilised and would probably grow this quarter, raising hopes of a revival in European oil demand.
Markit's widely followed Eurozone Purchasing Managers' Index (PMI) rose to a 16-month high of 48.8 in June from May's 48.3, and an index measuring output that feeds into the wider composite PMI jumped to 49.8, its highest since February 2012.
The more upbeat European survey balanced PMIs from China and India showing signs of cooling economic growth. China's official PMI report was better than expected.
Brent crude for August dropped as low as $101.63 per barrel after the Chinese factory data, but then recovered sharply to hit a high of $103.47 before trading around $103.24 by 1310 GMT, up $1.08.
Front-month Brent shed more than 7 percent in the second quarter ended June, its third straight quarterly decline and the longest such stretch of losses in 15 years.
U.S. crude was up $1.27 to $97.83 a barrel.
"Almost the entire commodities sector is up today on the manufacturing figures," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
"There is a perceptible sense of relief that the Chinese PMI did not slide below the 50-mark as some people had feared."
Markets were watching the U.S. Federal Reserve nervously for indications on the future of its bond-buying programme, which analysts say has helped support commodities.
A top Fed official signalled the U.S. central bank may move to roll back its bond purchases in its September meeting, a move that could strengthen the dollar. But the timing will also depend on the U.S. labour market, and investors are waiting for more clues from a job report on Friday.
Dollar-denominated commodities tend to move inversely to the greenback, and fluctuations in the currency over the past weeks have been a primary mover of oil prices. A weak jobs report would undercut the dollar again and lift Brent.
Jitters over the Fed's bond-buying programme partly led hedge funds and other large speculators to slash their bets on rising U.S. crude oil prices in the seven days to June 25, regulatory data showed on Friday.
Uncertainty over the Fed's programme and the slow-growth outlook helped to offset curtailments in supply that might have otherwise pushed up prices.
(Additional reporting by Florence Tan in Singapore; editing by James Jukwey)