UPDATE 4-Oil falls towards $110 on stock build, Iran mood
* U.S. says Iran talks intense, serious
* U.S. crude stocks up, Cushing shows 1st build since July -API
(Updates prices, adds quote)
LONDON, Oct 17 (Reuters) - Oil fell towards $110 a barrel on Thursday, after industry data showed crude stocks rose in the United States.
More data will come after the reversal of the partial government shutdown there.
Positive rhetoric around talks over Iran's nuclear programme also helped pressure crude, since progress could eventually soften or remove sanctions against its oil exports.
Brent crude was down 47 cents to $110.12 a barrel by 1040 GMT. The November contract that expired overnight ended 90 cents higher, while the December contract settled up $1.17. U.S. oil fell 43 cents to $101.86.
Prices pushed sharply higher on Wednesday after Washington's last-minute deal to avert a debt default.
"The anticipation of the U.S. budget agreement rallied prices yesterday, but now the unexpectedly large U.S. stock build in the API stats has pushed them back down again this morning," said Christopher Bellew, broker at Jefferies Bache.
Data from the American Petroleum Institute (API) showed crude inventories at the Cushing, Oklahoma, hub rose last week for the first time since early July, while overall U.S. crude stockpiles also gained.
U.S. crude stocks rose by 5.9 million barrels in the week to Oct. 11, the API data showed, more than double forecasts in a Reuters poll of analysts for a build of 2.2 million barrels.
Energy Information Administration (EIA) data, usually released weekly on a Wednesday, were not released this week due to the shutdown. Traders were awaiting guidance on when the EIA would next release its data.
Investors were also focusing on delayed economic indicators to gauge the outlook for U.S. demand and signs of progress in talks between Iran and world powers over Tehran's disputed nuclear programme.
"There is clearly a risk that at least some sanctions against Iran will be lifted before the end of 2014, and the surprises could be sooner rather than later," said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland.
Years of sanctions have cut Iranian oil exports by more than 1 million barrels per day.
The United States on Wednesday described two days of talks with Iran as the most serious and candid to date, after Western diplomats said Iran hinted it was ready to scale back sensitive atomic activities to secure sanctions relief.
The same day, the Senate and House of Representatives ended weeks of political brinkmanship that had unnerved markets by passing measures to fund the federal government. U.S. President Barack Obama then signed a bill to end the shutdown.
The budget deal offers only a temporary fix, however, funding the government until Jan. 15 and raising the debt ceiling until Feb. 7.
(Additional reporting by Alexander Winning in London and Manash Goswami in Singapore; editing by William Hardy)