Oil eases as global demand concerns return, overshadowing Saudi supply doubts

* Manufacturing activity shrinks in Germany, France, Japan
* Saudi could resume full post-attack output next week -
source
* U.S. oil inventories likely fell last week - Reuters poll

By Florence Tan
SINGAPORE, Sept 24 (Reuters) - Oil prices eased in early
Asian trade on Tuesday as weak manufacturing data from Europe
and Japan focused market attention on a gloomy outlook for
demand, though lingering uncertainty over Saudi supply
disruption braked the drop.
Brent crude futures LCOc1 fell 29 cents to $64.48 a barrel
by 0154 GMT, while U.S. West Texas Intermediate (WTI) futures
CLc1 were at $58.40, down 24 cents.
"The demand side of the equation is back in focus," Michael
McCarthy, senior market analyst at CMC Markets in Sydney said,
pointing to sluggish manufacturing numbers in leading economies
in Europe as well as Japan. "That's why we're seeing a little bit more (downward)
pressure on Brent than West Texas at the moment."
Still, oil prices remained at comparatively elevated levels
for the year in the wake of the mid-month attack on Saudi
Arabia's largest oil processing facility that halved output at
the world's top oil exporter.
Reuters reported that Saudi Arabia has restored more than
75% of crude output lost after attacks on its facilities and
will return to full volumes by early next week. But the Wall
Street Journal reported on Monday that repairs at the plants
could yet take months longer than anticipated. European powers - Britain, Germany and France - backed the
United States in blaming Iran for the Saudi oil attack, urging
Tehran to agree to new talks with world powers on its nuclear
and missile programmes and regional security issues.
Meanwhile a preliminary Reuters poll found on Monday that
U.S. crude oil and distillate stockpiles were expected to have
dropped last week. EIA/S
Seven analysts polled by Reuters estimated, on average, that
crude inventories fell 800,000 barrels in the week to Sept. 20.
The poll was conducted ahead of key reports from the
American Petroleum Institute, an industry group, to be released
on Tuesday and from the Energy Information Administration on
Wednesday.