UPDATE 3-Oil edges up on China data, tighter supply
* Asian markets mark second day of gains after upbeat factory data
* Tight supply from Libya adds to support
* Coming Up: U.S. ISM Manufacturing PMI Aug; 1400 GMT
(Recasts, updates prices, adds quote, changes dateline)
LONDON, Sept 3 (Reuters) - Oil futures gained slightly on Tuesday as firm Chinese economic data bolstered expectations of demand growth, even as supply has tightened due to the collapse of Libyan exports.
Brent crude was up 17 cents at $114.50 a barrel at 0835 GMT. U.S. oil rose 20 cents to $107.00 from Friday's settlement, as due to the Labor Day holiday there was no Monday settlement for the U.S. benchmark.
China's services sector grew steadily in August as domestic demand picked up, official data showed on Tuesday, adding to signs that government measures have started to steer the world's second-largest economy out of its longest slowdown.
This followed strong manufacturing data from China and Europe the previous day.
Libyan exports are running at below 10 percent of export capacity at below 100,000 barrels per day according to a Reuters estimate as armed groups tighten their grip on the sector.
"Logic calls for continued disruption," said Bjarne Schieldrop, analyst at SEB in Oslo.
Market participants are waiting for the U.S. Institute of Supply Management to publish its bellwether PMI for U.S. factories later on Tuesday.
Investors are also awaiting U.S. jobs data on Friday and a clearer indication from the Federal Reserve on the timing of a rollback in its monetary stimulus to gauge the outlook for oil.
(Editing by William Hardy)