U.S. oil prices edged lower Monday as abundant supplies weighed on the market, muting any potential impact from conflicts in Ukraine and Libya.
Supply-demand fundamentals are becoming the dominant driver in oil markets, with growing global oil production and falling consumption overwhelming concerns about potential supply interruptions, analysts said. Meanwhile, instability in countries that were once thought to pose a risk to supplies have failed to have any real impact.
Tensions in Eastern Europe continued to mount, with Ukraine accusing Russia of sending tanks over the border as fighting with pro-Russia rebel separatists intensified and Russia saying it intends to send a second convoy of aid vehicles into the area, even though the first one last week crossed into Ukraine without permission from Kiev.
In Libya, rebels apparently seized the airport in Tripoli.
Yet the oil market's moves were muted. Light, sweet crude for October delivery fell 30 cents to settle at $93.35 a barrel on the New York Mercantile Exchange Brent futures rose 36 cents to $102.65 a barrel on the ICE Futures Europe exchange.
Barclays analysts cut their 2014 price forecast for both contracts, citing weaker import demand in the U.S. and China, the world's two top consumers.
When Russia's provocations toward Ukraine began earlier this year, crude markets jumped in the expectation that sanctions against the country could reduce supplies from the world's second-largest petroleum exporter.
But sanctions haven't impeded flows, and Libyan barrels, prized for their light quality, have returned to the market, after production plummeted in the wake of the Arab uprising and overthrow of the Moammar Gadhafi government.
In addition, the cushion between supply and demand is getting wider.
In its latest assessment earlier this month, the International Energy Agency reduced its outlook for the world's oil-demand growth in 2014 to one million barrels a day and said global supplies were 840,000 barrels a day higher than year-ago levels. Iraq has continued to produce more than three million barrels a day despite an aggressive push by Islamist rebels in the northern part of the country, and Libyan production continues to come back online, with operations resuming at the Waha oil field that could bring output back to 800,000 barrels a day.
In that vacuum, U.S. and global oil benchmarks have been on a prolonged slide. On the Nymex, crude futures have fallen 13% in two months, and the global Brent contract has fallen 10%.
"Overall, the main theme in the market is we have ample supplies," said Gene McGillian, an analyst at wholesale brokerage Tradition Energy.
September gasoline futures rose 1.13 cents to $2.7497 a gallon. September diesel rose 0.9 cent to $2.8369 a gallon.