Brent crude rose above $110 a barrel on Monday on a weaker dollar and concerns over global oil supplies, after losing $16 last week in its biggest ever decline in dollar terms.

After the massive losses for oil on Thursday, banks Goldman Sachs and JP Morgan both predicted increases for crude because of tight supplies.

The dollar also reversed direction, with euro bouncing back in early Asian trade as traders scooped it up after a steep drop last week, helping send the greenback down 0.4 percent against a basket of currencies by 0218 GMT.

"The dollar should remain weak in the short term. The ECB didn't raise interest rates and that caused the euro to fall last week, but QE (quantitative easing) in the US will continue until June," said Tony Nunan, a risk manager with Mitsubishi Corp. in Tokyo.

However, uncertainty over how the euro zone will tackle debt crises in some of its member countries could come back to haunt the single currency.

Brent crude for June rose by 92 cents to $110.05 a barrel by 0232 GMT. US crude, which lost a record $16.75 last week, was up by $1.21 to $98.39.

The Reuters-Jefferies CRB index , a global benchmark for commodities prices, last week staged its biggest weekly drop since late 2008. "The market is likely to trade sideways till the dust settles and new data emerges," said Nunan.

According to technical charts, Brent futures are expected to revisit Friday's low of $105.15 per barrel, while US crude could head back down to $94.63, said Reuters market analyst Wang Tao.

Ongoing unrest in the Middle East and North Africa and tightening oil supplies will continue to support prices, analysts said.

"While financial bush fires or perhaps a rapid resolution to the Libyan civil war could radically alter market dynamics, the balance of both risks and fundamentals still points to a supply-constrained world," said US investment bank JP Morgan in a research note, echoing an earlier call by Goldman Sachs.

JP Morgan raised its 2011 Brent forecast by $10 to $120 a barrel, and expects the global market to be under supplied for the rest of the year by 500,000 barrels per day. - Reuters