Deepening light earlier losses, U.S. February light crude slid 48 cents to $62.66 a barrel by 0734 GMT after Gazprom said it had reached a gas supply deal with Ukraine, seeming to end a row that briefly disrupted exports to Europe. European gas oil futures, which shot 5 percent higher on Tuesday amid fears that the temporary cut in Russian gas supplies could boost demand for other heating fuels as the winter turns frigid, slid 1.5 percent to $534.50 a ton. London Brent crude traded at $60.83, down 52 cents. Russia cut natural gas exports through Ukraine on January 1 after its ex-Soviet neighbor refused to pay a four-fold price increase, but it restored flows a day later when European nations complained that their supplies had also been curtailed. On Wednesday Gazprom chief executive Alexei Miller said the firm had agreed to sell natural gas to Ukraine for five years from January 1, a move that may set at ease European consumers who depend on Russia for a quarter of their gas. "This amicable resolution will likely reduce the risk premium for supply disruptions in the global energy markets," Darius Kowalczyk, Hong Kong-based senior investment strategist at CFC Seymour Securities. INVESTORS PILE IN The dip on Wednesday barely dented a rally that has added nearly $5 to prices over the past week, as fresh investment and speculative funds flow into the market, signaling that commodities are set to remain a hot ticket item for money managers in 2006. "Investors have an innate tendency to allocate money to sectors that make money, and the strong commodity bull market still has some way to run, " said Michael Coleman, managing director of Singapore's Aisling Analytics, a hedge fund manager. Oil averaged $56.70 a barrel last year, about 37 percent more than in 2004, and analysts say the lack of spare capacity and the existence of geo-political uncertainties -- most recently the Russia-Ukraine gas row -- could keep the rally going. PIN/REUTERS