UPDATE 4-Oil choppy as cold, demand hope lift, dollar curbs

                                
 * Cold weather in Europe, U.S. to provides support
                                
 * Dollar strength, euro woes limit oil gains
                                
 * Shut Nigerian pipeline, militant activity supports oil
                                
 * Coming up: U.S. Jan. crude contract expires on Monday
 (Recasts, updates prices; changes byline and dateline,
previously LONDON)
                                
 By Robert Gibbons
                                
 NEW YORK, Dec 20 (Reuters) - Oil prices rose on Monday in
choppy trading as the U.S. January crude futures contract
neared expiration and as cold weather and expectations holiday
driving will boost gasoline demand offered support, even as a
stronger dollar and concerns about euro zone debt helped limit
oil's gains.
                                
 A shut pipeline in Nigeria amid more activity by militants
and tensions on the Korean peninsula also helped support oil.
                                
 Amid year-end trading, investor caution was fueled by the
continuing concerns about euro zone debt woes. The dollar index
<.DXY> strengthened and the euro fell after ratings agency
Moody's said it may cut the ratings on some Spanish banks.
[USD/]
                                
 A stronger dollar can pressure dollar-denominated oil
prices as it raises the value of dollars paid to producers and
raises oil prices in markets using other currencies.
                                
 The expiring U.S. January contract <CLc1> rose 28 cents to
$88.30 a barrel at 12:46 p.m. EST (1746 GMT), trading between
$87.26 and $88.75.
                                
 Crude prices reached a 26-month high of $90.76 on Dec. 7.
                                
 U.S. crude for February delivery <CLc2> rose 20 cents to
$88.80, having traded from $87.73 to $89.20.
                                
 Monday's total U.S. crude futures trading volume was at
373,271 lots during the noon hour in New York.
                                
 ICE Brent crude for February <LCOc1> rose 42 cents to
$92.09 a barrel, also in choppy trading.
                                
 "The economic momentum is picking up as we end the year on
the basis of reports we've seen so far," said Phil Flynn, an
analyst at PFGBest Research in Chicago. "The dollar is strong
on continuing concerns about the euro zone's fiscal troubles
and that is limiting any gains made in oil prices."
                                
 A monthly Reuters oil price poll showed on Monday a jump in
estimates for 2011. Analysts expect oil prices to average $86 a
barrel next year, up almost $3 from last month's poll.
[ID:nLDE6BG0WQ]
                                
 Capital flows into China slowed in November from a near
record high in October, central bank data showed, which could
reduce the need for an imminent tightening of monetary policy.
[ID:nL3E6NK06O] Commodities investors have eyed China's efforts
to cool inflation because China has been the major source of
demand growth.
                                
 "The global risks for the holidays are not small. The
Koreans keep on provoking each other, there is still a risk of
further tightening measures from China and Europe remains full
of surprise with its peripheries and their bond yields," said
Olivier Jakob of Petromatrix.
                                
 North Korea, China's neighbor, said it would not react to
military drills by South Korea on Monday, despite an earlier
threat to retaliate. [ID:nL3E6NK01M]
                                
 U.S.-based Chevron <CVX.N> said on Monday it had suspended
production from an oil pipeline in Nigeria's Delta state
[ID:nLDE6BJ0BX], although Royal Dutch Shell <RDSa.L> said it
had ended a one-month force majeure in Nigeria after repairing
a pipeline. [ID:nLDE6BJ1EM]
                                
 COLD WEATHER SUPPORTS
                                
 Snow and frigid temperatures caused disruption across
northern Europe for a third day on Monday, stranding travelers,
snarling traffic and shutting schools, and the bad weather is
likely to continue through the week. [ID:nLDE6BJ0JD]
                                
 Temperatures in the U.S. Northeast, the nation's largest
heating oil consuming region, were forecast to be near to below
normal [ID:nDTN355] and, while U.S. heating demand this week
was expected to be 2.1 percent below normal, heating oil demand
was expected to be 4.6 percent above normal. [ID:nSGE6BJ05E]
                                
 But, less supportive to distillates, an index that tracks
the tonnage hauled by U.S. trucks fell in November after two
straight monthly gains, according a late-Friday report from the
American Trucking Associations. [ID:nWEN4680]
                                
 Investors will eye weekly oil inventory reports to see if
U.S. gasoline stockpiles show signs of supply being moved into
the tanks of retailers anticipating a demand boost from
Christmas holiday travel.
                                
 U.S. oil inventory data from the American Petroleum
Institute was due late Tuesday afternoon, with the government's
report following on Wednesday morning.
 (Additional reporting by Gene Ramos in New York and Dmitry
Zhdannikov in London; Editing by Walter Bagley)