* Euro zone talks over Greek debt crisis stall
* German manufacturing data points to expansion
* Coming Up: API crude stocks weekly data; 2130 GMT (Recasts, updates prices, adds comment)
By Yeganeh Torbati
LONDON, Jan 24 (Reuters) - Brent crude oil fell to $110 on Tuesday as investors ignored the latest tension between Iran and the West and supply concerns in Africa and focused on the chances of a Greek debt default that could hit energy demand.
European policymakers are struggling to come up with a plan to save Greece from a default that would hurt the region and the global economy, depressing energy demand.
Euro zone finance ministers on Monday rejected as insufficient an offer made by bondholders to help restructure Greece’s debts, sending negotiators back to the drawing board and raising the threat of a default.
Front-month Brent crude slipped 64 cents to $109.94 per barrel by 1513 GMT. U.S. crude extended losses to more than $1 at the start of open-outcry floor trading in New York, to $98.50 a barrel.
President Barack Obama said the United States would impose new sanctions on Iran over its disputed nuclear programme after the European Union agreed on Monday to ban imports of Iranian crude starting in July.
Iranian politicians responded to the EU with a renewed threat to block the Strait of Hormuz, a crucial oil chokepoint, if Iran’s exports were blocked, and raised the possibility of an immediate halt to oil sales to Europe.
But after weeks of tense exchanges between Tehran and Washington’s allies and escalating sanctions, markets shrugged off the latest Middle East tension.
“Yesterday’s announcement by the EU regarding an oil embargo against Iran failed to lift prices since it was well expected and pre-announced in advance,” said Carsten Fritsch, a commodities analyst at Commerzbank.
“There’s still some risk regarding threats to close the Strait of Hormuz, or threats from Iran to stop oil exports to the EU immediately,” Fritsch said. “But it seems like the market doesn’t believe Iran will do so given its dependence on oil revenues.”
The five-month delay built into the EU embargo may mean it will never be fully enacted, said James Zhang, an oil analyst at Standard Bank.
“The twist is that the implementation of the embargo will not start until 1 July. We expect Iran is likely to reopen negotiation over its nuclear work before then, which could mean that the embargo might not be implemented at all,” Zhang wrote in a note.
South Sudan’s government said on Monday it would shut off oil production over a dispute with its northern neighbour, Sudan. South Sudan produces about 350,000 barrels per day (bpd), according to official estimates from November.
President Salva Kiir Mayardit accused Khartoum of having “looted” revenues amounting to roughly $815 million and building a tie-in pipeline to divert 120,000 bpd of southern production flowing through the north.
In a possible boost for oil demand, German manufacturing showed an expansion in January for the first time since September, according to the purchasing managers’ index (PMI) survey by Markit.
The rest of Europe also showed signs of growth on Tuesday, as the Eurozone Purchasing Managers’ Composite Index jumped to 50.4 from December’s 48.3, according to Markit. That was its highest reading in four months and beat the highest forecast of 49.5 in a Reuters poll. [IDn:nL9E7J203]
Euro zone industrial new orders fell in November from the previous month, data from the EU’s Statistics Office showed on Tuesday, though the 1.3 percent month-on-month drop was narrower than consensus expectations of a 2.2 percent fall in a Reuters poll of economists.
Another factor influencing prices is data due later on Tuesday from the American Petroleum Institute on stockpiles in the world’s top oil consumer, the United States.
Commercial crude inventories are expected to have risen 800,000 barrels for the week ended Jan. 20 due to higher imports and slightly lower refinery runs, a preliminary Reuters poll of analysts showed. (Additional reporting by Manash Goswami; editing by James Jukwey)