If you take the two terms in their commonly used application, yes it is an oxymoron.
However, libertarian socialists hold that wage-labour relations are in effect anti-liberal. Therefore they seek to abolish capitalist relations that have been construed as 'rational'. There is nothing inherently harmonious about hierarchy, which is what economic libertarianism within the context of private ownership relies upon. If you take liberty as a field that should also apply to the relations of wage-labour, then libertarian socialists seek to establish the sort of 'libertarian conditions' that would emancipate and autonomize workers, the poor, etc.
In that context it is not so much an oxymoron, but rather a mutation of what is commonly understood as 'libertarianism'.
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