UPDATE 8-Brent crude oil drops to $113 on Italian election fears
* Deadlock in Italian polls revives euro zone worries
* Fed's Bernanke defends bond-buying stimulus
* Iran and big powers hint at nuclear talks concessions
* API inventory data due at 4:30 p.m. EST (2130 GMT
(Recasts with updated prices, market activity; changes byline and dateline, previous LONDON)
NEW YORK, Feb 26 (Reuters) - Brent crude oil fell to a one-month low of $113 a barrel on Tuesday as concerns about the inconclusive Italian election revived investor fears about instability in the euro zone and weaker growth in fuel demand.
The vote result in the euro zone's third-largest economy stoked fears that the country's politicians would be unable to form a government strong enough to carry out effective reforms.
The election results "played out in the end of the day yesterday" in the markets, pushing prices lower early on Tuesday, said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Oil markets also watched as U.S. Federal Reserve Chairman Ben Bernanke defended the central bank's bond-buying stimulus, which is seen as tied to the economic recovery and thus oil demand, before Congress early on Tuesday.
But the oil complex decoupled from U.S. equity markets, which were positive by 11:10 a.m. EST (1610 GMT).
Brent crude hit a session low of $113.00 a barrel, its weakest since Jan. 28, and was down 94 cents at $113.50.
U.S. crude oil was down 38 cents at $92.73 a barrel, after touching a low of $91.92, a level not seen since Jan. 4.
Brent rallied to a nine-month high near $120 in early February but has since fallen back on signs the global economy remains fragile.
Investors also eyed talks in Kazakhstan between major powers and Iran over Tehran's nuclear program. The group of six nations - the United States, Russia, China, Germany, Britain and France - was expected to offer Iran limited sanctions relief on Tuesday if it agrees to halt its most sensitive nuclear work.
While few traders expected the meeting to create an immediate breakthrough, a reduction in tensions could weigh on oil.
Prices could come under further pressure should weekly reports on U.S. crude and product stockpiles, due on Tuesday and Wednesday, show an increase.
A Reuters poll ahead of industry group the American Petroleum Institute's report on Tuesday at 4:30 p.m. EST (2130 GMT) forecast crude stocks would be up by 2.3 million barrels, the sixth straight weekly increase.
The closely watched U.S. Energy Information Administration numbers are released at 10:30 a.m. EST (1530 GMT) on Wednesday.
(Addtional reporting by Peg Mackey and Alex Lawler in London and Manolo Serapio Jr. and Manash Goswami in Singapore; Editing by Alison Birrane and Dale Hudson)