Oil prices wavered Monday, falling below $115 as traders monitored fighting between Russia and Georgia that could potentially disrupt supplies. Buying was limited as the dollar extended its advance against the euro.

Oil hovered at its lowest levels since early May, as the dollar edged higher against the euro and pound. The strengthening U.S. currency, as well as signs that demand growth is moderating in key energy-consuming countries around the world, has sapped the momentum from this year's surge in energy prices.

"The market's still kind of reeling," said Darin Newsom, senior analyst at DTN in Omaha, Neb. He said the recent drop in crude attracted a bit of buying Monday, particularly as many traders focused on the Russia-Georgia conflict. But, he said, more signs of economic slowdown could take prices back below $100 a barrel -- a level not seen since early April.

After falling nearly $10 a barrel last week, light, sweet crude for September delivery fell 30 cents to $114.90 a barrel in midmorning trading on the New York Mercantile Exchange, after falling below the $115 a barrel mark.

U.S. retail gasoline prices edged down to $3.81 a gallon, on average, on Monday from $3.818 a day earlier, according to auto club AAA, the Oil Price Information Service and Wright Express. On July 17, the average hit a record $4.114.

The euro fell to $1.4993, and the pound fell to $1.9187, while the dollar is holding near 110 yen. A weak dollar helped boost oil prices earlier this year, because dollar-denominated commodities are often used as hedges against inflation and a falling U.S. currency. Gains in the currency tend to reverse that trend.

Peter Beutel, president of the energy risk management firm Cameron Hanover, wrote in a research note that investors appear to be selling commodities to get back into stocks, which traded modestly higher by late morning trading on Monday.

Beutel noted in his Monday note that crude oil open interest -- or the number of futures contracts that are not closed or delivered on a given day -- has sunk by more than 100,000 contracts since the record high in mid-July, a sign of heavy liquidation.

Vienna's JBC Energy, citing the Azeri company SOCAR, said shipments from two Georgian ports ceased during the weekend, adding "the company could declare force majeure on its exports from the two ports." Force majeure frees oil companies from liabilities if a catastrophe or other major event it cannot control stops them from meeting their obligations.

Georgia said its troops have retreated from the South Ossetia province and are honoring a cease-fire, but Russia disputed the claim and U.S. officials said Moscow was expanding its blitz into new areas.

The South Ossetia province broke away from Georgian control in 1992. Georgia, whose troops have been trained by American soldiers, began an offensive to regain control over South Ossetia last week. Georgia says it was responding to attacks by separatists. In response, Russia launched attacks on Georgian troops.

A Russian official has said more than 2,000 people have been killed in South Ossetia since Friday; the figure could not be confirmed independently.

In London, Brent crude for September delivery rose 7 cents to $113.40 a barrel.

In Nymex trading, heating oil futures rose more than a penny to $3.1437 a gallon, while gasoline prices gained less than a penny to $2.8910 a gallon. Natural gas futures rose by more than 11 cents to $8.365 per 1,000 cubic feet.

Nymex crude is down about $30 from its high of $147.27 on July 11.