* 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)
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 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 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 defenses.
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 smolder, the potential for fresh outages in Nigeria, Libya and Venezuela continues to hang over the market." (Additional reporting by Alex Lawler in London, Florence Tan in Singapore and Dmitry Zhdannikov in London; Editing by Marguerita Choy and David Evans)