NEW YORK: Oil prices were down for a third straight day on Friday, on track to their third weekly decline in four, as the dollar rallied on expectations of a rate hike before the year-end after strong US jobs growth for October.

Brent and US crude futures headed for a weekly loss of at least 4 percent as the dollar added to the bearish sentiment in oil since Wednesday's government data showing a sixth weekly build in US crude stockpiles.

Up 5 percent since early October, the dollar hit 6-1/2-month highs against a basket of currencies after US nonfarm payrolls rose by 271,000 last month, the largest growth in almost a year.

The spike in employment makes it more likely the US Federal Reserve will hike interest rates in December, further bolstering the dollar and making commodities denominated in the greenback less affordable to holders of other currencies.

"The jobs number may be strength for the US economy but it's being interpreted as weakness for oil," said Pete Donovan, broker at New York's Liquidity Energy.

"The thing to watch will be calendar spreads in crude. If they keep widening, I don't imagine we will get much upside retracement."

Brent, the global benchmark for oil, was down 52 cents, or 1.1 percent at $47.46 a barrel by 10:55 a.m. EST (1555 GMT). It showed a loss of 4.2 percent on the week.

US crude slid 80 cents to $44.40. It was down 4.7 percent on the week.

The discount between spot US crude and its nearest month was above $1 a barrel, its widest since mid-May. The discount, also known as "contango", reaches above $5.60 for oil slated for delivery in a year as traders store crude with the hope of selling it later for better prices.

Traders will be looking out later in the day for the weekly reading on the US oil rig count from industry firm Baker Hughes at 1:00 p.m. (1800 GMT).

US oil drillers have cut rigs over the past nine weeks, a sign that low crude prices were keeping energy firms away from new production.

Wall Street dipped modestly, rebounding from earlier losses, a sign that investors have grown comfortable with the idea that the Fed will raise rates before the end of the year.

The Dow Jones Industrial Average fell 38.38 points, or 0.21 percent, to 17,825.05, the S&P 500 lost 8.95 points, or 0.43 percent, to 2,090.98 and the Nasdaq Composite added 2.82 points, or 0.06 percent, to 5,130.56.

"We've seen in the past seven to ten trading days the likelihood of a Fed increase has been rising and yet we've seen the equity markets handle that pretty well," said Sean Lynch, co-head of global equity strategy at Wells Fargo Investment Institute in Omaha, Nebraska.

"Today's numbers probably reinforce the fact they probably move in December ... We think we could be set up for a little bit of a rally here into year-end."

A broad worldwide index of equities was lower, losing 0.6 percent.