* Violence in Nigeria adds to supply worries
* China demand outlook seen as bearish
(Recasts with latest price action, adds quote)
LONDON, April 14 (Reuters) - Oil rose towards $108 per barrel on Monday on concern that escalating tension between Russia and Ukraine could lead to supply disruption, though prices were capped by the prospect of a recovery in Libyan exports.
Brent crude rose 49 cents to $107.82 by 1203 GMT, after gaining 0.6 percent last week. U.S. oil slipped 15 cents to $103.59 after settling up 34 cents in the previous session.
Ukraine's president threatened military action after pro-Russian separatists occupying government buildings in the east ignored an ultimatum to leave and another group of rebels attacked a police headquarters in the troubled region.
The United States is prepared to step up sanctions against Russia, a major exporter of crude oil to Europe and Asia, if separatist action continues.
"It can create some anxiety, as the only answer (to Russia) from the U.N. or NATO is more sanctions," said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.
"It's not de-escalating, so it's not surprising to see some risk positions being taken."
Russia has massed 35,000 to 40,000 troops near the Ukrainian border in addition to the 25,000 troops it recently moved into Crimea, Lyall Grant, Britain's U.N. ambassador, said.
As the crisis worsens, the United States may focus sanctions on Russians close to President Vladimir Putin as well as on Russian entities. They will not necessarily target entire business sectors such as mining, banking and energy, however.
EU foreign ministers will meet on Monday to discuss how to toughen sanctions against Russia.
Libya's western Zawiya oil port was operating normally after protesters vacated the entrance to the facilities and the adjoining refinery reopened, developments which briefly pushed oil into negative territory.
An almost complete cut in Libyan supply from around 1.4 million barrels per day under the previous government has underpinned prices, but there are growing signs of the potential for a substantial recovery.
"It's a surprise for markets that the ports are opening up, as although there was a deal signed a week ago, it was not expected it would be sustainable," Bjarne Schieldrop, an analyst at SEB in Oslo, said.
In Nigeria, meanwhile, a bomb exploded at a crowded bus station on the outskirts of Abuja and killed 71 people during rush hour on Monday morning, a police spokesman said.
This was the first such attack near the Nigerian capital for two years, and led to increased worries about oil supply disruption.
Investors awaited fresh economic growth data from China, the world's second-biggest oil consumer.
In a Reuters poll, economists forecast that growth slowed to 7.3 percent in the first quarter from 7.7 percent in the final quarter of 2013. This would be the slowest pace of growth in five years and near the minimum needed to ensure stable employment.
(Additional reporting by Keith Wallace in Singapore; editing by Keiron Henderson and Jane Baird)