Updates at 11:55 a.m. EDT, changes byline, dateline previous LONDON

By Georgina McCartney

HOUSTON, Feb 26 (Reuters) - Oil prices rose more than $1 on Thursday as investors awaited the outcome of a third round of talks between the United States and Iran over the latter's nuclear program.

Brent crude futures LCOc1 were up $1.17, or 1.65%, at $72.02 a barrel by 11:55 a.m. EDT (1655 GMT). WTI futures CLc1 rose 87 cents or 1.33% to $66.29.

Both contracts had fallen by more than $1 earlier in the session.

Iran and the United States are holding indirect talks in Geneva over their long-running nuclear dispute to avert a conflict after U.S. President Donald Trump ordered a huge military build-up in the region.

Analysts and traders said the reversal in crude prices was linked to ongoing developments around the talks. Iran's Foreign Minister Abbas Araqchi and U.S. envoys Steve Witkoff and Jared Kushner have adjourned for a break and will resume the negotiations later in the day.

"Media reports coming out seem to show that things are not going so great in Geneva and we could be reaching the end of the road in terms of hostilities between Iran and the U.S. finally breaking out, so that is what the market is seeing and that is why prices are rallying," said John Kilduff, Partner at Again Capital.

Prices had been down more than $1 earlier in the session as the talks got underway.

"If we do get a deal with Iran, that would be very bearish for prices especially if there is talk of lifting sanctions because that would unleash a lot of oil into the market," said Phil Flynn, analyst at Price Futures Group.