UPDATE 5-Brent falls toward $104 on strong dollar, Iran talks
* West seeks first-step deal with Iran in Geneva talks
* Iran says deal possible "if everybody tries their best"
* ECB cuts rates to new low
* U.S. oil product stocks drop more than forecast-EIA
LONDON, Nov 7 (Reuters) - Brent crude oil fell towards $104 a barrel on Thursday as a strong dollar, plentiful supplies and continued progress in talks between Iran and the West over Tehran's disputed nuclear programme weighed on prices.
A move by the European Central Bank to cut interest rates to a new record low helped push up the dollar and added pressure to oil prices. The ECB was responding to a slump in inflation that has sparked fears the euro zone's economic recovery could stall.
Brent was down $1.04 at $104.20 a barrel by 1335 GMT. U.S. oil slipped 35 cents to $94.45 a barrel.
"A combination of bearish factors is pressuring the price: most importantly, there is overwhelming global supply with additional OPEC capacity expected before the end of the year," Andrey Kryuchenkov of VTB Capital said.
"A stronger dollar isn't helping either."
Gains in the U.S. currency make dollar-denominated crude more expensive for buyers outside the United States and are negative for oil demand.
World powers will seek to hammer out a breakthrough deal with Iran to start resolving a decade-old dispute over its nuclear programme in two-day talks that begin on Thursday.
Although both sides say an agreement is far from certain, Iran's Foreign Minister Mohammad Javad Zarif said a deal is possible "if everybody tries their best".
Investors were also awaiting U.S. nonfarm payroll data on Friday to gauge when the Federal Reserve might begin winding down its $85 billion-a-month bond-buying programme.
? A roll-back could further boost the dollar, making
dollar-denominated assets more expensive for holders of other currencies.
Data on Wednesday showed the euro zone's economic recovery lost a little momentum last month, making the U.S. numbers all the more crucial to gauge the demand outlook.
Demand for petrol in the world's top oil consumer last week was at its highest for this time of the year since 2010, according to weekly data from the U.S. Energy Information Administration (EIA).
U.S. gasoline stocks fell 3.8 million barrels, much larger than the 300,000 barrel draw analysts had expected, EIA figures showed.
The steep drawdowns in oil product stockpiles overshadowed a rise in crude inventories to 385 million barrels in the week ended Nov. 1, the largest seven-week build since May 2012.
"The strong demand for U.S. oil products was particularly remarkable; this made a major contribution to the destocking and sparked hopes that U.S. oil demand might be recovering," said a Commerzbank research note.
(Additional reporting by Manash Goswami in Singapore; editing by Keiron Henderson and Jane Baird)