* Weak PMI casts doubt on China recovery, oil demand
* Dollar at 3-yr high, QE3 uncertainties also weigh
* Coming up: euro zone PMI at 0758 GMT (Recasts, updates prices)
By Ramya Venugopal
CHENNAI, India, May 23 (Reuters) - Brent crude futures shed a dollar on Thursday to trade below $102 a barrel in a broad-based commodities sell-off, as data cast doubt on recovery in key consumer China and on worries about an early scale-back in Federal Reserve stimulus.
China's factory activity shrank in May, with the preliminary purchasing managers index (PMI) slipping to a seven-month low, reflecting slower local demand as well as headwinds from the United States and Europe.
Front-month Brent futures were trading 98 cents lower at $101.62 per barrel by 0627 GMT, after dropping more than a dollar during the session.
U.S. crude declined 95 cents to $93.33, extending the previous day's losses after inventory data suggested the gasoline market was well supplied ahead of the driving season.
Also weighing on oil prices was the dollar's jump to a three-year high after comments by Fed Chairman Ben Bernanke led to speculation the central bank may begin to scale back asset purchases this year.
"China's demand for oil will be impacted because the PMI numbers show that the economy is not doing as well as the market had expected," said Chen Hoay Lee, an investment analyst at Singapore-based commodity brokerage Phillip Futures.
"The weak PMI and the strong dollar will pressure Brent towards the $100 mark in the near term."
Investors are also looking out for the euro zone's PMI later on Thursday for more clues on the outlook for global demand.
Data from the Energy Information Agency showed that U.S. gasoline stockpiles are close to the highest level for this time of year since 1999, sparking expectations of a drop in product prices unless demand picks up as much.
Bernanke said in testimony to Congress, the Fed could "in the next few meetings take a step down" in its purchases if economic improvement continued, while the Fed minutes indicated a debate over how soon to start scaling back the stimulus.
Still, analysts say the dollar's rise may be overdone and fears of a pullback this year may be exaggerated.
"The bottom line, in our view, is that the Fed is not yet ready to start scaling back the degree of accommodation," Bank of America-Merrill Lynch analysts said in a report.
"A slowdown in growth and uncomfortably low inflation will defer tapering until next year," they added.
The U.S. central bank's three quantitative easing programs have released hundreds of billions of dollars into money markets over the last four years, boosting many commodities, including oil. (Editing by Clarence Fernandez and Joseph Radford)
