* Oil near 11-year low, weighs on Treasuries
* Analysts eye FOMC meeting for rate increase this week
* Oil prices hover at 11-year lows
By Tariro Mzezewa
NEW YORK, Dec 14 (Reuters) - Prices on U.S. Treasuries fell on Monday during choppy trading, paring Friday's gains, as traders await possibly the first interest rate increase by the Federal Reserve in nine years later this week.
The Fed's policy setting group, the Federal Open Market Committee, will begin a two-day meeting on Tuesday and is expected by investors to raise rates from near zero.
"The choppiness in the market is indicative that we are close to the FOMC meeting and that is going to be the prime determinant of where rates go from here," said Tom Simons, money market strategist at Jefferies & Co in New York.
Yields retreated from multi-week lows reached on Friday, but losses were contained by oil prices hovering near 11-year lows and by scrutiny in the high-yield bond market after Third Avenue's high yield fund and credit fund Stone Lion Capital prevented investors from exiting, heightening anxiety in the sector which is among the most vulnerable to higher U.S. rates.
"We're still seeing some of the credit fears that came out on Friday at play," said Ellis Phifer, market strategist at Raymond James in Memphis, Tennessee.
The continued slide in oil prices suggests inflation has remained subdued, boding well for the long-end of the curve, which is expected to outperform when the Fed raises interest rates.
Investors have almost fully priced in a rate increase this week and the debate has largely shifted to how many rate increases there will be in 2016.
U.S. 10-year notes fell 15/32 in price to yield 2.193 percent, up from 2.13 percent late on Friday. The 10-year yield dropped to a five-week low on Friday and posted its largest one-day fall since July.
The 30-year bond fell 1-02/32 in price to yield 2.93 percent, up from 2.877 percent on late Friday. The 30-year bon yield slid to a six-week low on Friday.
In a research note on Friday, Societe Generale said it expects the front-end of the Treasury curve to look "rather pegged" ahead of the Fed meeting, reflecting a market that has fully priced in a December liftoff. It forecast seven increases over the next four years.
(Reporting by Tariro Mzezewa; Editing by Andrew Hay)