Does he have a "grab and hold" cue yet, or a "tug" cue?
What you have to realize is while it seems fairly simple to us, it's a fairly complex behavior chain for the dog. They have to go to the towel, put their mouth on the towel, tug the towel off, keep it in their mouth and bring it to you. So you have a target, grab n' hold, tug, hold and retrieve. So just move slow and make sure he understands all parts of the chain.
So what I'd do is start with the towel in your hands, easy as pie...have him target to it, put his mouth on it, eventually tugging it gently out of your hands. When he's reliably doing the entire chain of behaviors on cue, I'd move closer to the stove...and keep working on the task/cue. Then hang it on the stove handle and give him the cue.
Once he gets it, the behavior will then be helpful for all sorts of things. Bean brings a blanket to John across the room.
"I don't have any idea if my dogs respect me or not, but they're greedy and I have their stuff." -- Patty Ruzzo
"Dogs don't want to control people. They want to control their own lives." --John Bradshaw