UPDATE 6-Brent crude up on debt limit news and supply worry
* U.S. House to take up debt ceiling bill
* Dollar strength, equities dip limit gains
* China's economic growth better in Q4
* Coming up: CFTC positions data 3:30 p.m. EST
(Recasts with updated prices, market activity; changes dateline, pvs LONDON)
NEW YORK, Jan 18 (Reuters) - Brent futures rose and U.S. crude pared losses in choppy trading on Friday, reacting to news that the House of Representatives will consider a bill to raise the U.S. debt ceiling enough to allow the country to pay its bills for another three months.
Also helping oil recover from Friday lows were supply disruption fears being reinforced by the Islamic militant attack and hostage-taking on a gas plant in Algeria, an OPEC member, and by lack of progress from another round of talks between the U.N.'s nuclear agency and Iran about Tehran's nuclear program.
In Washington, Republican House Majority Leader Eric Cantor said that next week the legislature will authorize a three-month "temporary debt limit increase to give the Senate and House time to pass a budget."
U.S. crude seesawed near flat after reaching a four-month peak on Thursday amid technical signs that U.S. crude was set for a move lower. The front-month topped 70 on the 14-day relative strength index (RSI), which chart-watching traders view as signal that a commodity has reached an overbought level.
"Crude oil futures have slipped ... as profit-taking emerges after (U.S. crude) touched its highest level in four months and its 14-day RSI rose above 70," Addison Armstrong, senior director at Tradition Energy said in a note.
"A stronger dollar is also helping to slow the upside momentum in the oil market," Armstrong added.
Brent headed for a fifth weekly gain in six weeks, needing to finish above $110.64 to avoid ending lower a second consecutive week. U.S. crude stayed on pace to end the week higher for a sixth consecutive week.
Brent March crude rose 60 cents to $111.70 a barrel by 1:23 p.m. EST (1823 GMT), back above the front-month Brent 100-day moving average of $110.95, after slumping to $110.47 during the session.
U.S. February crude was down 1 cent at $95.49 a barrel, having traded from $94.91 to $95.67. Thursday's session peak of $96.04 was the highest price since September.
World equity markets slipped from a 20-month high as Wall Street stocks faltered on a report showing U.S. consumer sentiment at its lowest in over a year.
The dollar index was up 0.44 percent. A stronger U.S. currency usually applies pressure to dollar-denominated commodities like oil.
A report on Friday showed China's economy grew at its slowest pace in 13 years in 2012, though a year-end surge from infrastructure spending and improved trade signalled more stable growth after a recent slowdown.
Data showing a recovery in exports, stronger than expected industrial output and retail sales, together with robust fixed asset investment, indicated that Beijing's pro-growth policy mix has gained traction, lending support to oil prices.
About 20 foreigners were still being held hostage or missing inside the plant on Friday after Algerian forces stormed the desert complex and freed hundreds of captives taken by Islamist militants, who threatened to attack other energy installations.
Following the attack, Libya's oil protection force said it was beefing up security around its oil and gas installations in the western and southern areas bordering Algeria.
The International Energy Agency (IEA) said on Friday that upward pressure on prices could continue as rising Chinese demand and falling OPEC supplies tighten world markets and drain inventories.
"All of a sudden, the market looks tighter than we thought," the IEA said in its monthly report. "OECD inventories are getting tighter - a clean break from the protracted and often counter-seasonal builds that had been a hallmark of 2012."
(Reporting by Robert Gibbons in New York, Jessica Donati in London and Manash Goswami and Ramya Venugopal in Singapore; Editing by Grant McCool)