Aug 9 (Reuters) -ICE cotton futures rose nearly 2% on Friday, helped by higher oil prices and short covering as investors looked forward to the upcoming monthly World Agriculture Supply and Demand Estimates report from the U.S. Department of Agriculture.

* Cotton contracts for December CTZ4 rose 1.13 cent, or 1.68%, to 68.37 cents per lb at 1507 GMT.

* "Crude has rallied and it took cotton a couple days to catch up, but it looks like that market has influence on cotton and the only other thing is speculators short covering in front of Monday's WASDE report," said Rogers Varner, president of Varner Brokerage in Cleveland.

* However, "the forecast for Texas and Delta in the next 10 days is hot and dry and it's not a good forecast," he added.

* Oil prices edged higher on Friday and were on course for a weekly gain of more than 3% as U.S. jobs data eased demand concerns while fears of a widening Middle East conflict continue to raise supply risks. O/R

* The U.S. dollar index .DXY fell 0.2%, making cotton less expensive for overseas buyers.

* Investors' focus now shifts to the USDA monthly World Agriculture Supply and Demand Estimates report due on Monday.

* Elsewhere, Chicago corn futures recovered to little changed levels on Friday after earlier matching last week's near four-year low, while wheat and soybean prices rose. GRA/

Reporting by Anmol Choubey in Bengaluru; Editing by Maju Samuel