* February U.S. crude futures contract expires on Tuesday
* Expiring February contract at $6 discount to March
* Russian gas reaches Europe via Ukraine after row ends
* Cold weather in northern hemisphere winter
(Recasts)
By Christopher Johnson
LONDON, Jan 20 (Reuters) - Oil reversed early losses on
Tuesday, sending expiring February U.S. crude futures back above
$37 a barrel, on wintry weather in the northern hemisphere and
on reports that OPEC was tightening supply.
U.S. light crude for February delivery <CLc1>, which ceases
trading at the close of business on Tuesday, was up 93 cents at
$37.44 a barrel by 1537 GMT, having previously hit a new 2009
low of $32.70. There was no official settlement on Monday due to
a U.S. holiday.
The March contract <CLH9>, which takes over as front month
on Wednesday, was up 63 cents at $43.20, and was around $6 a
barrel above the February contract due to brimming crude stocks
at Cushing, Oklahoma, the delivery point for NYMEX contracts.
London Brent crude <LCOc1> was up 70 cents to $45.20 a
barrel.
Oil prices fell sharply across the board earlier on Tuesday
after Russian gas company Gazprom <GAZP.MM> resumed pumping gas
to Europe via Ukraine, meaning there would no longer be an
increased need for oil products to replace gas. []
"Crude bounced off the earlier $32.70 low," said Mike
Fitzpatrick, vice president at brokers MF Global. "You've got
expiration and the strong dollar and weak stock markets are
helping the forward curve flatten also."
Economic uncertainty deepened on Tuesday after Royal Bank of
Scotland <RBS.L> posted the biggest loss in British corporate
history, helping depress European stocks after Japan's Nikkei
index closed down 2.31 percent. <>
U.S. markets were closed on Monday for the Martin Luther
King holiday and trade was thin, especially on the front-month
February contract.
Oil prices have fallen by more than three quarters since
record highs above $147 a barrel hit last July, as financial
turmoil has evolved into a global economic crisis and weakened
demand.
Two recent supportive factors have been removed, after
Russia and Ukraine signed their 10-year gas deal and a ceasefire
between Israel and Hamas in Gaza eased fears of disruption to
supply. [] []
There are increasing signs that OPEC is implementing cuts in
oil supply agreed at a meeting in December.
In his first interview since assuming the post at the start
of the month, OPEC's new president, Botelho de Vasconcelos, told
Reuters the Organization of the Petroleum Exporting Countries
was fully enforcing its deepest ever oil supply curbs.
He said the cuts should be enough to boost prices.
Christopher Bellew, broker at Bache Commodities in London,
said the OPEC news was supportive: "The OPEC cuts are
stabilising the markets, even if they are not making it go up
very much."
Traders will be watching for Chinese data later this week.
China, once a driver of the surge in oil prices, is expected
to release fourth-quarter GDP data that economists say will show
a 7.0 percent growth, much higher than in the developed world,
but the slowest pace of expansion for world's third-biggest
economy in nearly a decade. []
(Reporting by Christopher Johnson and Joe Brock in London and
Robert Gibbons in New York; editing by Anthony Barker)
