* Libya restarts El Sharara oil field; output to hit 600,000 bpd
* New protests may block other export pipeline in western Libya
* Slowing Chinese economy, strengthening dollar also drag on gains
By Jacob Gronholt-Pedersen
SINGAPORE, Jan 6 (Reuters) - Brent crude edged up over $107 a barrel on Monday, bouncing back from its biggest weekly fall in six months, but the restart of a key Libyan oil field could limit further gains.
Crude supply from Libya is set to more than double from current levels after production at the El Sharara field resumed over the weekend as protesters ended a two-month blockade.
Brent crude for February delivery rose 13 cents to $107.02 at 0423 GMT, after having settled lower in the previous four sessions, partly on expectations of rising Libyan exports.
U.S. crude fell a cent to $93.95 a barrel. The contract fell $1.48 a barrel on Friday and posted its biggest weekly drop since June 2012.
"The situation in Libya will continue to be the main topic this week," said Chee Tat Tan, an investment analyst at Phillip Futures in Singapore.
The resumption of Libya's El Sharara field could lift the country's production to 600,000 barrels per day (bpd). Output from the OPEC-member had fallen to 250,000 bpd from 1.4 million bpd in July, boosting international oil prices.
The restart of the field was a rare success for Prime Minister Ali Zeidan, who has been trying to end a wave of oilfield and port blockages. But the situation remains volatile, with a different set of protesters now blocking an oil pipeline in the west that runs to the Mellitah export port.
"We have seen some new protests going on, so the actual return of supply to world markets will depend on how well the government controls the situation," said Tan.
Concerns over slowing growth in China and a strengthening dollar also countered gains in oil and other commodities.
Growth in China's services sector fell to a four-month low in December as business expectations dropped, a government survey showed on Monday, adding to evidence that the second largest economy lost steam at the close of 2013.
The dollar hovered near a four-week high, supported by an upbeat outlook on the U.S. economy by Federal Reserve Chairman Ben Bernanke that fanned expectations of faster stimulus reduction by the central bank.
A stronger greenback makes it more expensive for importers to purchase dollar-denominated oil, weighing on demand.
South Sudan's oil production remained a concern even after the government and rebels last week agreed to peace talks. Three weeks of fighting have left more than a thousand people dead and disrupted oil supply from the African country.
The talks could face delays, after gunfire erupted in the country's capital, Juba, on Sunday.
An official in neighbouring Sudan, through which land-locked South Sudan pumps its oil for export, said last week 239,000 barrels a day of crude were being shipped though its pipeline. (Reporting By Jacob Gronholt-Pedersen; Editing by Tom Hogue)