* Gulf Coast pipeline to average 525,000 bpd in 1st year
* Oil supported by reports of higher global demand
* U.S. distillate stocks seen down - Reuters poll
* Coming Up: API oil inventory data 4:30 p.m. EST (2130 GMT)
(Updates prices, poll data, adds analyst quote)
NEW YORK, Jan 22 (Reuters) - U.S. crude oil climbed 2 percent on Wednesday on the start up of a new major pipeline, expected to help eliminate a bottleneck that has depressed the U.S. futures for three years, and on expectations that frigid weather in the Northeast would prompt strong demand for heating fuel.
TransCanada Corp said it has begun to ship crude oil on its 700,000 barrel per day (bpd) pipeline, which flows from Cushing, Oklahoma, the pricing point for the New York Mercantile Exchange's West Texas Intermediate (WTI) contract, to Gulf Coast refiners. The company expects to transport an average 525,000 bpd in the first year of service.
"The opening of the TransCanada pipeline is providing a boost for the market today," said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.
Oil prices were also supported by bitterly cold weather that sent U.S. natural gas prices to a two-and-a-half-year high, traders and brokers said.
Brent followed U.S. crude higher after two days of reports underscored strong global oil demand growth.
The International Monetary Fund (IMF) predicted higher growth in advanced economies, while China's central bank injected liquidity into money markets to ease bank-to-bank lending in the world's second-largest oil consumer.
Brent oil for March delivery was last trading at $108 per barrel by 2 p.m. EST (1900 GMT), near a three-week high. U.S. crude oil futures rose $1.77 to $96.75, also near a three-week high.
TransCanada's announcement helped narrow U.S. oil's discount to Brent to $11, the smallest since Dec. 20. The spread was last trading at $11.35.
DISTILLATES IN DEMAND
U.S. RBOB gasoline futures rose nearly 2 percent to a high of $2.6722 per gallon. Ultra low-sulfur diesel futures (ULSD), commonly known as heating oil, were up modestly, by 1.84 cents to $3.0331, after a steep rise in prices on Tuesday.
Investors awaited the American Petroleum Institute's weekly report due at 4:30 p.m. EST (2130 GMT). U.S. commercial crude oil stocks likely rose 600,000 barrels last week, the first rise in eight weeks, according to a Reuters poll.
Analysts anticipated a 900,000-barrel drop in distillate stocks, including heating oil and diesel fuel, while gasoline stocks were expected to have risen 2.1 million barrels, according to a Reuters poll.
The U.S Energy Information Association will release its weekly inventory data on Thursday at 11 a.m. EST (1600 GMT), delayed a day due to the Martin Luther King, Jr. holiday on Monday.
(Additional reporting by Ron Bousso in London, Manash Goswami in Singapore; Editing by Jane Baird, Keiron Henderson, Sophie Hares and Marguerita Choy)