* U.S., UK say to keep pressure on Iran * U.S. crude in Cushing hub at 9-month high * Brighter U.S. Fed outlook lifts dollar * Coming up: U.S. weekly jobless claims, Thursday By Gene Ramos NEW YORK, March 14 (Reuters) - Oil futures dropped on Wednesday after data showed U.S. crude stockpiles rose last week for the fourth time in a row and the dollar strengthened, tempering investor appetite for riskier assets. Trading was choppy but prices clawed back briefly in the early afternoon after U.S. President Barack Obama, in a joint news conference with British Prime Minister David Cameron, said the window for a diplomatic solution with Iran over Tehran's nuclear program was shrinking. Crude stocks at the U.S. delivery hub in Cushing, Oklahoma surged 2.5 million barrels to a nine-month high, government data showed. Inventories there have risen for eight straight weeks, amassing the biggest eight-week gain since January 2009. "WTI (West Texas Intermediate) futures are increasingly showing the strains of a 10-million-barrel build at Cushing since mid-January," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. In total, U.S. crude stockpiles increased by 1.8 million barrels to 347.5 million barrels, weekly data from the Energy Information Administration showed, in line with the forecast in a Reuters poll. "The build in Cushing stocks has widened Brent's premium to $20 and you're seeing the strength in the dollar discourage buying of riskier assets," said Hamza Khan, analyst at the Schork Group in Villanova, Pennsylvania. In London, ICE Brent crude for April delivery settled at $124.97, down $1.25, or 0.99 percent. It settled at $126.22 on Tuesday, the highest close for front-month Brent since April 8, 2011. U.S. April crude settled at $105.43, falling $1.28, or 1.2 percent. Brent's premium against U.S. crude closed at $19.54, from $19.51 on Tuesday. Brent's total trading volume dipped 14.8 percent from its 30-day average, Reuters data showed. U.S. crude volume was down 10.8 percent from its 30-day average. DOLLAR GAINS The dollar was up 0.48 percent against a basket of currencies in late trading, hitting an 11-month high against the yen and a one-month peak against the euro. The greenback strengthened after the U.S. Federal Reserve, in a statement issued on Tuesday following a policy meeting, painted a moderately brighter outlook for the U.S. economy. Gains in the dollar can pressure dollar-denominated commodities by making them more expensive to consumers using other currencies. In euro terms, Brent crude was just below all-time highs set in the previous session, piling pressure on a fragile economic recovery in Europe, which is lagging the United States and Asia. IRAN TENSIONS Obama urged Tehran to seize the opportunity of talks with world leaders to avert "even worse consequences", and said the United States and Britain would keep up the pressure on Iran. The West suspects Iran of using its nuclear program to build atomic weapons, which Tehran denies. The United States and the European Union have imposed sanctions against Iran for its disputed nuclear activities, and mounting tensions between the Islamic Republic and the West have elevated crude oil prices. After dallying for days, Iran on Wednesday said it welcomed the resumption of stalled nuclear talks with six world powers, saying the two sides should set "the date and the venue", Iranian media reported. A Reuters/Ipsos poll showed on Tuesday that most Americans would support U.S. military action against Iran if there were evidence that it was building nuclear weapons, even if such action led to higher gasoline prices. Iranian oil officials, meanwhile, showed no signs of alarm about potential international sanctions, saying their Asian customers remain loyal. "Trading has been choppy all day, but the headlines from Washington regarding Iran pulled prices briefly from the lows," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.