Oil was neutral at $102 a barrel on Monday as support from geopolitical tensions in Ukraine and Libya was negated by ample supply preventing a rebound from last week's 14-month low.
Brent crude fell seven cents to trade at $102.22 at 1500 GMT on Monday, compared to a 14-month low of $101.07 it struck on 19 August. US crude was down 42 cents at $93.23.
Libyan exports have risen in the past few weeks although a further recovery looks uncertain, analysts say, and the revival stood in sharp contrast to rising violence in Libyan urban centres.
Rockets hit eastern Libya’s Labraq airport in eastern Libya on Monday, a day after fire destroyed the terminal at Tripoli's main airport.
The escalating violence between armed factions has prompted Libya’s ambassador to Egypt to seek the international community’s help to protect its oilfields, airports and other key state assets.
At the same time, the country’s National Oil Company said that the key Waha oilfield had resumed operations and that the 160,000-barrel field could resume supplying crude to the Es Sider terminal as soon as Tuesday.
Libyan oil output has recovered to 655,000 barrels per day, the official said, up from a low of 200,000 bpd struck earlier this year before new deals with rebels in recent months but still way off its pre-war rate of 1.7 million bpd.
"Oil prices are likely to stabilise, so we no longer expect prices to slide any further," said Carsten Fritsch, analyst at Commerzbank. "Risks to the oil supply are still considerable."
Underlining the extent of the recent selling pressure, exchange data for the week to 19 August released on Monday showed hedge funds and other big speculators had cut their bets on rising Brent prices to the lowest in more than two years.
Weak demand and healthy production have helped create a supply glut in the Atlantic Basin, pushing Brent into its longest contango since early 2011, Morgan Stanley said.
In a contango market, immediate supply is cheaper than oil for delivery later.
“We expect Brent to trade in a slightly lower range for much of the third quarter, barring any geopolitical escalation,” the bank's analysts, led by Adam Longson, said in a note.
“Libyan supplies could trickle back, but maintenance and security issues should keep exports subdued.”
In Europe, Russian President Vladimir Putin will meet his Ukrainian counterpart Petro Poroshenko for the first time in months on Tuesday to try to reach a compromise on Ukraine.
Russia wants to send a second humanitarian aid convoy to eastern Ukraine in the near future, Foreign Minister Sergei Lavrov said on Monday after Kiev and the West criticised Moscow for sending the first without official permission.
The dollar index rose as the US Federal Reserve prepared to lay the groundwork for the central bank's first interest rate increase in nearly a decade.
A stronger dollar makes dollar-denominated commodities such as oil more expensive for holders of other currencies, and tends to weigh on prices.