LONDON: Brent crude fell below $110 a barrel on Monday, down from last week's two-and-a-half month high, as worries over Ukraine eased slightly following a presidential election.
Resistance levels for Brent and U.S. crude, or West Texas Intermediate (WTI), on technical charts were also keeping a lid on gains. Market activity was expected to be limited as the U.S. and UK markets were closed for holidays.
July Brent crude was down 62 cents at $109.92 a barrel by 1108 GMT, after hitting a two-and-a-half month high on May 22.
U.S. crude futures for July delivery were down 28 cents to $104.07 a barrel, after settling on Friday at the highest since April 21.
"You had the Ukraine elections, and Russia said it will respect it ... so there is no escalation," Olivier Jakob at Petromatrix consultancy in Zug, Switzerland.
Last week, fighting in Ukraine along with Libyan and South Sudanese production cuts had helped drive up Brent, but tensions eased after Russia said it would respect Ukraine's presidential elections.
On Sunday, a decisive win for billionaire Petro Poroshenko in Ukraine's presidential election raised hopes of political stability in Ukraine - a main gas supply route to Europe from Russia.
Russia said on Monday it was ready for dialogue with Poroshenko but warned authorities in Kiev not to step up armed operations against separatists in the east.
Also pressuring oil prices, Statoil said on Friday it had resumed some production at the Snorre B platform in the North Sea.
Money managers raised their net long U.S. crude futures and options positions in the week to May 20, the U.S. Commodity Futures Trading Commission (CFTC) said, ahead of peak summer demand. Monday's Memorial Day holiday usually marks the start of the U.S. driving season.
Speculators also raised their net long positions in Brent by 25,661 contracts to 200,876 in the week, ICE data showed. They raised net long positions in gasoil by 7,386 contracts to 68,479 in the week.
Growth in oil supply is expected to exceed demand this year, spurring softer prices in the second quarter before rebounding in the second half of the year on seasonally stronger consumption, Morgan Stanley analysts led by Adam Longson said in a note.
Barring new supply outages, global oil capacity will rise by 1.8 million barrels per day (bpd) this year, the fastest growth in a decade, the bank said, while product demand will grow by 1.1 million bpd.
LIBYA, IRAQ TENSIONS
Libya's El Sharara and El Feel oilfields remained shut, a spokesman for state-run National Oil Corp (NOC) said on Sunday, almost two weeks after the government said protests at the western fields had ended.
OPEC production is likely to decline this year, despite an addition of 400,000 bpd of new capacity led by Iraq and Saudi Arabia, Morgan Stanley analysts said.
"Disruptions in Libya are likely to persist, and we see little hope for a material increase in Iranian oil exports during 2014," they said.
Sudan has offered to supply materials, engineers and electricity to South Sudan to speed up the repair of oilfields damaged during a five-month rebellion that has cut output by a third, South Sudan's oil minister said on Saturday.
Iraq filed for arbitration against Turkey on Friday to stop exports of oil from Kurdistan after European markets bought the first load of oil piped from the autonomous region. Kurdistan said this was a "hollow threat" that would fail.
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