UPDATE 9-Oil steadies on hopes of full Saudi output restart

* Saudi Arabia to restore full output by next week - source
* Business survey suggests euro zone growth has stalled
* UK believes Iran was behind Saudi oil attacks

(Add latest prices, quote; changes byline, dateline, previous
LONDON)
By Scott DiSavino
NEW YORK, Sept 23 (Reuters) - Oil stabilized on Monday,
after gaining nearly 7% last week, as lingering concerns over
global supplies following the Sept. 14 attack on Saudi oil
facilities offset prospects for a faster-than-expected
restoration of the kingdom's output and on signs of European
economic weakness.
Saudi Arabia has restored around 75% of crude production
lost in the attacks that knocked down 5.7 million barrels per
day, or more than half of the kingdom's oil production, a
source, briefed on the latest developments in the attack on
Saudi oil facilities, told Reuters.
Global benchmark Brent futures LCOc1 were up 1 cent to
$64.29 a barrel by 11:30 a.m EDT (1530 GMT), while U.S. West
Texas Intermediate (WTI) crude CLc1 was up 16 cents, or 0.3%,
to $58.25.
"Although the market has settled down in recent sessions, we
still feel that it has drifted into a new and higher trading
range given the loss of Saudi production that has already
developed and the need for a sizable risk premium to account for
the possibility that another drone attack could be forthcoming,"
Jim Ritterbusch, president of Ritterbusch and Associates in
Galena, Illinois, said in a report.
A survey showing euro zone business growth stalled this
month, dragged down by shrinking activity in Germany where a
manufacturing recession deepened unexpectedly, also weighed on
oil and other markets such as equities.
"Oil prices are tracking European markets lower ...
understandably knocked by the woeful manufacturing data from the
bloc and the implications for global growth and demand," said
Craig Erlam, analyst at OANDA.
Brent, however, has still gained over 19% this year, helped
by a supply-limiting pact led by the Organization of the
Petroleum Exporting Countries, although concern about slowing
economic growth has limited the advance.
Tension in the Middle East has escalated since the Saudi
attack. The Pentagon has ordered additional U.S. troops to be
deployed in the Gulf region to strengthen Saudi Arabia's air and
missile defences. Britain believes Iran was responsible for the attack and
will work with the United States and European allies on a joint
response, Prime Minister Boris Johnson said. The United States
and Saudi Arabia have also blamed Iran, which denies
responsibility.
The Saudi attacks have refocused investor attention on the
prospect of supply disruptions in other OPEC producers.
Investors had been less concerned about supply risks due to
ample supplies.
"The geopolitical risk premium has returned with a vengeance
and supply-side developments have been thrust back into the
spotlight," Stephen Brennock of oil broker PVM said.
"While Saudi oil facilities smoulder, the potential for
fresh outages in Nigeria, Libya and Venezuela continues to hang
over the market."