UPDATE 1-Oil falls below $34 on gas deal, gloomy economy

                                
 (Updates prices, recasts lead))
                                
 * Oil slides below $34 after Russia-Ukraine gas deal
                                
 * Asian stock markets open lower on bearish economic news
                                
 * Demand weak, eyes on China's Q4 data
                                
 By Maryelle Demongeot
                                
 SINGAPORE, Jan 20 (Reuters) - Oil extended losses below $34
a barrel on Tuesday, after Russia and Ukraine signed a gas deal
that would help secure supplies to Europe, while no improvement
was in sight for oil demand.
                                
 Economic gloom deepened after the Royal Bank of Scotland
posted the biggest loss in the UK's corporate history, with
stock markets in Asia following European counterparts lower and
the Japan Nikkei benchmark closing down 2.31 percent. <.N225>
                                
 The dollar rose to a six-week high against the euro on the
news, making U.S.-denominated commodities less attractive to
investors. [USD/]
                                
 The United State was closed on Monday for the Martin Luther
King holiday, and trade was thin, especially on the front-month
February contract, due to expire on Tuesday.
                                
 U.S. light crude for February delivery <CLc1> fell to
$33.90 a barrel by 0649 GMT, down $2.61 from Friday's
settlement and near Monday's low of $33.89, when no official
settlement was issued due to the holiday.
                                
 The March contract, which takes over as front-month on
Wednesday, was down $2.32 to $40.25, and more than $6.00 a
barrel above the February contract due to brimming crude stocks
at Cushing, Oklahoma, the delivery point for NYMEX contracts.
                                
 London Brent crude <LCOc1> fell 40 cents to $44.10 a
barrel, after closing $2.07 lower on Monday.
                                
 "Seasonal cold weather continues to be the only supportive
factor on the demand side," said French bank Societe Generale
in an overnight report.
                                
 Oil prices have fallen by more than three quarters since
record highs above $147 a barrel hit last July, as a financial
turmoil has evolved into a global economic crisis and weakened
oil demand.
                                
 Two recent supportive factors have been removed, after
Russia and Ukraine signed a 10-year gas deal clearing the way
for the resumption of supplies to a freezing Europe, and
implementation of a ceasefire between Israel and Hamas in Gaza
eased supply worries. [ID:nLI376498] [ID:nLI27333]
                                
China, once a driver of the surge in oil prices, is expected
to release this week 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. [ID:nPEK111034]
 (Editing by Ramthan Hussain)