ICE cotton prices slipped on Thursday despite an upbeat federal weekly export sales report, as investors booked profits after a three-session rally that lifted the natural fiber to its highest level in more than two weeks in the last session.

* Cotton contracts for May (CTc2) fell 0.47 cent, or 0.69%, to 68.1 cents per lb at 10:52 a.m. ET (1552 GMT).

* "The market is up about 220 points off that low two or three weeks ago and it's typical the sales were priced in before the report is released. The sales and shipments today were very good," said Rogers Varner, president of Varner Brokerage.

* The U.S. Department of Agriculture's weekly export sales report on Thursday showed net sales of upland cotton totaling 244,700 running bales (RB) for 2024/2025 were up 30% from the previous week, while it was down 14% from the prior four-week average.

* However, export sales of upland cotton rose 18% to 260,900 RB from the previous week and 27% from the prior four-week average.

* "I do think that the demand structure of the market is much better now than it has been since before Christmas... the market is slowly trying to move a little higher; it's not a straight up move, it's more of a stair step move," Varner said.

* In its February World Agriculture Supply and Demand Estimates (WASDE) report on Tuesday, U.S. export estimates were kept steady at 11 million, while the global export outlook was raised by 30,000 bales to 42.51 million.

* Elsewhere, oil prices fell sharply as a potential peace deal between Russia and Ukraine continued to exert downward pressure, along with rising crude inventories in the United States.

* Higher oil prices make cotton-substitute polyester more expensive.