* Stronger-than-expected U.S. jobs data raises Dec rate hike bets
* Oil prices on track to a third week of declines in four
* Market barely moves on U.S. rejection of Keystone project
* Coming up: Weekly U.S. rig count report at 1800 GMT (Updates with Obama announcing rejection of Keystone pipeline; adds latest prices)
By Barani Krishnan
NEW YORK, Nov 6 (Reuters) - 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 an interest rate hike before the year-end after strong U.S. jobs growth in October.
Brent and U.S. crude futures headed for a weekly loss of more than 4 percent as the dollar added to the bearish sentiment in oil since Wednesday's government data showing a sixth weekly build in U.S. crude stockpiles.
Up 5 percent since early October, the dollar hit 6-1/2-month highs against a basket of currencies .DXY after data showing U.S. nonfarm payrolls rose by 271,000 last month, the largest growth in almost a year.
The spike in employment makes it more likely the U.S. Federal Reserve will hike 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 U.S. 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 LCOc1 , the global benchmark for oil, was down 50 cents, or 1 percent, at $47.48 a barrel by 12:18 p.m. EST (1718 GMT). It showed a loss of 4.1 percent on the week.
U.S. crude CLc1 slid 72 cents to $44.48. It was down 4.5 percent on the week.
The market took in stride President Barack Obama's rejection of the proposed Canada to U.S. Keystone XL pipeline project that has divided petroleum interests and environmentalists for over seven years.
Calendar spreads in U.S. crude were little changed after the decision on Keystone.
The discount between spot U.S. crude and its nearest month remained above $1 a barrel, its widest since mid-May.
The discount, also known as "contango," was steady at above $6 for oil slated for delivery in December 2016 and above $9 for December 2017 crude as traders stored oil in the hope of selling it later for better prices.
Traders will be on the lookout later on Friday for the weekly reading on the U.S. oil rig count to see if energy firms were still shying away from new production due to low prices.
The data, due from industry firm Baker Hughes (N:BHI) at 1:00 p.m. (1800 GMT), has shown rig cuts the past nine weeks.