Jan 3 (Reuters) -ICE cotton futures gained more than 1% on Wednesday as higher oil prices overshadowed pressures from a firmer dollar.

* Cotton contract for March CTH4 firmed 1.32 cents, or 1.7%, at 79.94 cents per lb at 11:13 a.m. ET (1613 GMT), after falling in the previous session. The contract is on track to log its biggest daily rise in nearly a month.

* "There might be a sympathetic move in terms that oil is up, so cotton is up," said Keith Brown, principal at cotton broker Keith Brown and Co, in Georgia.

* "Brazil's having a hard time exporting physical cotton. The market is also waking to the idea that we could see a lot less acres this year."

* Oil prices rose more than $1 a barrel, after reports of a disruption to Libya's top oilfield added to supply concerns emanating from tensions in the Red Sea. O/R

* Higher oil prices make polyester, a cotton substitute, more expensive.

* Market focus is on the United States Agriculture Department's (USDA) weekly export sales report due on Friday, a day later than usual this week due to the New Year holiday. EXP/COT

* Last week's report showed that exports of 231,000 running bales were at their highest level for the marketing year 2023/2024. More than half of those exports were to top consumer China.

* "I think we're looking ahead to a really good export sales report including some Chinese buying last week, the markets are hopeful that will continue for a while," said Jack Scoville, vice president at Chicago-based Price Futures Group.

* Limiting gains, the U.S. dollar rose 0.3%, making cotton more expensive for buyers holding other currencies. USD/

Reporting by Anjana Anil in Bengaluru; Editing by Shilpi Majumdar