Sept 14 (Reuters) -ICE cotton futures regained some ground on Thursday, after sliding more than 1% in the last session, buoyed by lingering concerns over supply and a rally in the oil market.

* Cotton contracts for December CTZ3 rose 0.7 cent, or 0.81%, to 87.59 cents per lb by 12:38 p.m EDT (1638 GMT).

* Prices on Wednesday snapped a three-day gaining streak, hurt mostly by a stronger dollar and concerns over demand from top buyer China amid economic risks.

* In the short term, rising oil prices are bolstering the entire commodity market, said Louis Barbera, partner and analyst at VLM Commodities, with the natural fiber market also digesting lower supply despite a generally low demand environment.

* Oil prices topped $93 a barrel for the first time this year, making cotton-substitute polyester more expensive. O/R

* The sentiment for cotton also got a fillip from gains in Wall Street. .N

* The U.S. Department of Agriculture (USDA) in its September World Agricultural Supply and Demand Estimates (WASDE) report this week projected lower U.S. and global output for 2023-24.

* But in the longer term, the outlook for all commodities is bearish and that's "going to suck up a lot of the consumer discretionary income", hurting demand, Barbera added.

* Traders also took stock of the USDA's another weekly exports report, which showed net sales of 67,400 running bales of cotton for 2023/2024, down 21% from the previous week.

* Exports of 118,200 running bales were down 33% from the previous week, the report said. EXP/COT

Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Shilpi Majumdar