* Chinese crude imports rise, imports from Iran drop
* Italian election exit polls point to hung parliament
* New talks on Iran's nuclear program to start on Tuesday (New throughout, updates prices, market activity; changes byline and dateline, pvs LONDON)
By Gabriel Debenedetti and David Sheppard
NEW YORK, Feb 25 (Reuters) - Brent crude rose on Monday after official Chinese data indicated strong demand in the world's second-largest oil consumer, though prices pared early gains as uncertainty surrounding Italian election results weighed on the euro and spooked markets.
Chinese oil imports rose more than 7 percent in January from a year earlier, customs data showed, while China also slashed imports from sanction-hit Iran by around a third, spurring fears of a tighter market.
"China's oil imports were up big in January," said Phil Flynn, an analyst at Price Futures Group in Chicago.
Robust demand growth from China contributed to a near $10 rally in Brent prices at the start of the year, but prices slipped 3 percent last week after oil industry sources said Saudi Arabia was preparing to lift output in the second quarter.
Brent crude rose around 1.5 percent on Monday to an early high of $115.87 a barrel, but by 12:25 p.m. EST (1725 GMT) w as trading just 56 cents higher at $114.66 a barrel.
U.S. crude was up 2 cents a barrel at $93.15, well off an earlier high of $94.46.
Exit polls from Italy's national election indicated the country could be heading for political stalemate, sparking fears of instability in the euro zone's third largest economy with center-left and center-right coalitions closely tied.
The euro reversed early gains of 1 percent to trade flat against the dollar, making dollar-priced commodities like oil less attractive to investors.
The center-right coalition led by former Prime Minister Silvio Berlusconi was leading in the race for the Italian Senate, dashing hopes of a pro-reform, center-left victory seen as crucial to dig the euro zone out of a debt crisis.
Oil traders were also waiting for Tuesday talks in Kazakhstan between Iran and global powers over Tehran's disputed nuclear program.
The six world powers, known as the P5+1, are set to offer Iran some relief from international sanctions if it agrees to curb production of higher-grade enriched uranium, a U.S. official said on Monday.
Investors are also awaiting Tuesday's testimony from U.S. Federal Reserve Chairman Ben Bernanke for clues on whether, and at what levels, the Fed will maintain its bond-buying stimulus program.
Financial markets were rattled last week after minutes of the Fed's January meeting suggested some Fed officials were mulling scaling back its strong monetary stimulus earlier than expected.
(Additional reporting by Robert Gibbons in New York, Ron Bousso in London, and Manash Goswami in Singapore; editing by Keiron Henderson and Anthony Barker)
