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, which ceases trading at the close of business on Tuesday, was up 93 cents at $37.44 a barrel by 1537 GMT (10:37 a.m. EST), 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, 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 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. .N225 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 stabilizing the markets, even if they are not making it go up very much." Traders will be watching for Chinese data later this week.

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