Brent crude rises above $107; Greece, Iran eyed
* Greece opinion polls support pro-bailout govt
* Euro off 2-year lows, Greece euro exit fears ease
* Lack of progress in Iran nuclear talks
By Luke Pachymuthu
SINGAPORE, May 28 (Reuters) - Brent oil edged above $107 per barrel on Monday as polls showing support for a pro-bailout government in Greece calmed fears of a euro zone exit hitting demand while the lack of progress in talks over Iran's nuclear programme spurred supply worries.
A weaker dollar also helped Brent mark a third straight session of gains, although the crude benchmark is still off more than 16 percent from this year's high above $128 reached in March given a wobbly outlook for the global economy.
Investor focus remained on Greece and Greek conservatives regained an opinion poll lead over the weekend, which if carried over to the elections in June would see the formation of government determined to keeping the country within the euro zone.
Greece was forced to call repeat elections for June 17 after a May 6 vote left parliament divided evenly between groups of parties that support and oppose the austerity conditions attached to a 130 billion euro bailout agreed with the European Union and International Monetary Fund in March.
Front-month Brent rose 57 cents to $107.40 a barrel by 0158 GMT, while U.S. crude was up 89 cents at $91.75.
"Today it really comes down to what is going on in Greece, the idea that Greece will stay within the euro zone calms the market," said Ben Taylor, a trader at CMC markets.
"A move towards creating a common euro bond, and stimulating the economy through growth-related policies versus austerity are factors that will be positive for markets."
The news sent the euro bouncing off two-year lows in Asian trade on Monday, hitting $1.2594 and pulling away from Friday's 1.2495, its lowest level since July 2010.
A dispute between Iran and the West intensified over the weekend, after Tehran refused to permit the International Atomic Energy Agency (IAEA) from visiting a nuclear site which is suspected of being used to develop nuclear weapons.
A report by the U.N watchdog last week said satellite images showed "extensive activities" at the Parchin complex, located southeast of Tehran. Iran has refused access to the complex saying it is a military site.
The U.S.-based Institute for Science and International Security think-tank has said there is concern Iran may be trying to cleanse the building at Parchin - possibly by grinding down surfaces, collecting the dust and washing the area thoroughly.
"Any escalation of tensions involving Iran is going to push up the risk premium and put the market on edge," said Taylor.
Six world powers failed to convince Iran last week to halt its most sensitive nuclear work, but they will meet again in Moscow next month to try to end a stand-off that has raised fears of a new war that could threaten global oil supplies.
Last November, an IAEA report found Iran had built a large containment vessel in 2000 at Parchin in which to conduct tests that the agency said were "strong indicators of possible weapon development".
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