This simulation should not oscillate, the diodes appear to letting current flow easily in either direction.
Is there something in my simulation settings causing this?

 

I have tried out the blank diode model which appears to be functioning as a perfect/normal working diode, there must be a bug in the specific simulated silicon diodes.

 

Have you thought about the fact that real diodes have junction capacitance, and real reverse leakage???

Here is a comparison of the reverse leakage of a 1n4148 compared to the theoretical diode...

 

The data sheet says about 0.004uA of reverse leakage current at 10 v @ room temp.
The frequency and charge rate in the sim above is pretty slow, in the millihertz. That does kinda make sense now.

 

I breadboard this circuit

As you can see in real world this circuit also oscillate. I use 10V as a PSU and TL082 as a op amp.
And I was unable to measure the voltage across the C1 capacitor. Because every time when I try put a oscope probe across C1 the probe kills the oscillations. Also when I change the op amp into BJT input type, osculations also stops.

 

This simulation should not oscillate, the diodes appear to letting current flow easily in either direction.
Is there something in my simulation settings causing this? View attachment 77740

Did you intend for diode D2 to point in opposite direction of the other two diodes?
If so, what did you expect this circuit to do?

Usually, a grounded capacitor connected to (-) input makes for an oscillator. Positive feedback adds hysteresis.

 

I was pushing the circuit to try to see why the simulation was doing what it was, as MikeML stated; there is simulated reverse current which does cause it to oscillated very slowly, less than a hertz.
I was thinking of the circuit as an ideal diode i guess, just lack of experience.