UPDATE 4-Oil sinks below $114 on Italy vote uncertainty
* Brent slips to 1-month low; U.S. oil falls to 7-week trough
* Deadlock in Italian polls revives euro zone worries
* Coming Up: Fed chief testimony; 1500 GMT
(Recasts, updates prices, previous SINGAPORE)
LONDON, Feb 26 (Reuters) - Oil fell below $114 a barrel on Tuesday, hit by doubts over demand growth as a potential political vacuum in Italy revived concern over instability in the debt-plagued euro zone.
The uncertainty in Rome, along with concerns the United States may rein in its economic stimulus and soft manufacturing data from China, is clouding the global economic outlook and could erode oil's modest price gains so far this year.
Brent crude hit a session low of $113.26, its weakest since Jan. 29, and was down 99 cents at $113.45 by 0940 GMT. U.S. oil slipped 84 cents to $92.27, after touching a low of $91.92 earlier, a level not seen since Jan. 4.
"The main driver now is the deadlock after the Italian election - it's triggered risk-off sentiment in the financial markets," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
Along with commodities, world equity markets slid and the euro hit its lowest in nearly seven weeks, before recovering.
The results confirmed expectations Italian politicians would not form a government strong enough to carry out effective reforms, reviving memories of the financial crisis that took the 17-member currency block to the brink of collapse in 2011.
Italy's centre-left coalition will win a majority in the lower house of parliament but the upper house will be deadlocked, the Interior Ministry said after almost all votes were counted following the weekend elections.
Brent is up a modest 2.4 percent so far this year, with prices failing to build on a rally to nine-month highs in early February, hurt by signs the global economy remains fragile.
And prices could come under further pressure should stockpiles of crude oil in the United States rise, as expected, for a sixth straight week.
An initial Reuters poll of analysts ahead of weekly reports forecast crude stocks rose by 2.3 million barrels.
There was also growing concern among investors that the Federal Reserve could ease up on its bond-buying programme sooner than expected.
All eyes will be on Fed Chairman Ben Bernanke's congressional testimony later in the day for clues. Markets suffered a two-day rout last week on concern the Fed could soon end the stimulus.
Investors also remain worried about a looming spending cut in top oil consumer the United States, where $85 billion will be slashed from the budget effective on Friday.
Stemming further losses in oil is the potential for rising tension in the Middle East.
Major powers start talks with Iran to force the Islamic republic to halt a controversial nuclear programme.
They will offer Iran some sanctions relief during talks in Almaty, Kazakhstan, this week if Tehran agrees to curb its nuclear programme, a U.S. official said.
(Addtional reporting by Manolo Serapio Jr. and Manash Goswami in Singapore; editing by James Jukwey)