- Metals prices also get a boost from decline in the dollar
- U.S. crude stockpiles fall from eight-decade record high
Copper futures gained for the first time in more than a week as a jump in crude oil prices helped spur a rally in commodities.
Oil rose after U.S. crude stockpiles fell from the highest level in more than eight decades. More-expensive oil boosts production costs, deterring miners from increasing output as the market struggles to unwind excess metal supplies. Copper also got a boost from a decline in the dollar, which boosts the appeal of the metal as an alternative asset.
“That move in crude is why we saw some higher prices in copper today,” David Meger, the director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. Also, “the slight weakness in the dollar is bringing about some relative strength here in copper,” he said.
Copper futures for May delivery advanced 0.3 percent to settle at $2.1435 a pound on the Comex in New York, the first gain since March 28.
The Bloomberg Commodity Index of 22 raw materials climbed 0.9 percent, erasing earlier losses.
Prices for metals including copper advanced last quarter as investors bought to close out short positions amid speculation that Chinese demand will improve. The gain may not be sustainable given a lack of fundamental support, and “the bear cycle for metals may last until the industry has significant capacity cuts or a strong recovery in demand,” according to a report from Bloomberg Intelligence.
In other markets:
- Aluminum and zinc retreated on the London Metal Exchange. Copper, nickel, lead and tin advanced.