UPDATE 6-Oil falls on rising supplies, Ukraine supports

* U.S. crude future fall, Brent-WTI spread widens

* Healthy U.S. supply picture, stocks seen building

* Ukraine crisis lends support to Brent

(Changes dateline from LONDON, adds analysts, updates prices)

NEW YORK, April 22 (Reuters) - U.S. crude futures fell on Tuesday as investors anticipated rising production and inventories in the world's top oil consuming nation and felt less risk stemming from the Ukrainian crisis, increasing the discount of the U.S. benchmark to Brent futures.

U.S. crude fell $1.9 percent to $102.45 a barrel by 11:10 a.m. EDT (1510 GMT) while Brent crude was down 98 cents to $108.96 a barrel. The sharper decline of U.S. crude widened the Brent-WTI spread <CL-LCO1=R> by 86 cent to $7.16.

Traders in Europe returned to work after the Easter long-weekend, adding to the momentum of falling oil prices when they saw little change in the standoff in eastern Ukraine, where separatists remained in control of government buildings.

While the crisis that has led to the worst confrontation between the United States and Russia since the Cold War continues, it has not deepened and what political risk there is impacts the European-based Brent contract more, analysts said.

"Traders are coming back from the holidays and taking some of that risk premium out of the market," said Phil Flynn, analysts at Price Futures Group.

"Going into the three-day holiday it was 'buy everything', no one wants to be short into the weekend. Now traders acknowledge the risk is Brent ... definitely Brent is going to be the first line of attack in the risk trade," he said.

Adding to the bearish outlook for U.S. crude is the expectation for yet another build in crude oil stocks, which have risen 43 million barrels since mid-January to 394 million barrels and are close to their all time high of 398 million barrels.

Analysts polled by Reuters estimate 2.7 million barrels were added to inventories last week. The Energy Information Administration will issue the data on Wednesday.

"Looks like production is staying strong and inventories are building and that's taking away some of the reasoning for oil trading as high as it is," said Addison Armstrong, senior director of market research at Tradition Energy, which estimated a 4 million-barrel build.

For Brent, sharper declines were halted by lingering concerns over Ukraine where a four-way peace deal signed last week to reduce tensions in the east has had limited impact. Pro-Russian separatists refuse to put down arms and pull out of occupied government buildings as Kiev and Moscow accuse each other of breaking the pact.

U.S. Vice President Joe Biden on Tuesday offered to back Ukraine's economy and urged Russia to make progress on its commitments under the deal, a day after Washington threatened to impose additional sanctions against Russia "in days."

Investors fear that further Western sanctions on Russia may disrupt oil supplies from the key producer.

"A lot of the Ukraine tension is priced in and will keep underpinning oil prices. We have been in a pretty broad (price) range and we are near the top of the range so unless things change significantly, we will drift lower," said London-based CMC Markets analyst Michael Hewson.

Oil investors are also watching the progress of talks between Iran and world powers to end Tehran's disputed nuclear programme. President Hassan Rouhani's government confirmed speculation on Monday it had reshuffled the leadership of Iran's atomic agency to sideline nuclear experts opposed to talks with the West on its atomic programme.

China's March crude oil imports from Iran rose more than a third from a year earlier, keeping imports in the first three months of 2014 close to the levels seen before Western sanctions were applied more than two years ago.

(Additional reporting by Ron Bousso in London and Manash Goswami in Signapore; Editing by Dale Hudson, David Evans and Marguerita Choy)