Commodities markets summary

A summary of trading in key commodities markets 

ENERGY
US oil rose on Tuesday and Brent reduced losses in volatile trade as a weaker dollar and a rise in equities markets lift prices that earlier slumped on concern over sovereign debt and uncertain demand prospects.
After tumbling below $120 a barrel for the first time in two weeks, Brent came back as US crude futures turned higher.
The expiring US front-month May contract posted the day's biggest gain, reversing after support firmed above last week's low trade of $105.31 a barrel.
Brent crude for June fell 28 cents to settle at $US121.33 a barrel, after slipping as low as $119.03.
Expiring US crude for May rose $1.03 to go off the board at $US108.15, bouncing early off a $US105.50 low.
US June crude rose 59 cents to settle at $US108.28, recovering after sliding to $US106.01, just above the contract's $US105.98 low from last week.

Brent's premium to the US June contract narrowed 87 cents to $13.05 a barrel, based on settlements, swinging in a range on Tuesday from $12.38 to $14.31.

Solid euro zone economic data helped the euro rebound against the dollar after its worst day in five months.

OPEC Secretary General Abdullah al-Badri, speaking at an oil and gas trade fair in Tehran, said he did not expect oil to fall below $100 this year, even though there was no shortage in the market.

US retail gasoline demand rose last week from the prior week, but high prices kept demand down versus year ago, MasterCard Advisors' SpendingPulse said in a report ahead of weekly oil inventory reports detailing US stockpiles and demand levels.

US crude oil stocks are expected to be up a seventh consecutive week, according to a Reuters survey of analysts on Tuesday. Gasoline stocks were expected to be lower, while distillate inventories were seen unchanged.

PRECIOUS METALS

Gold futures hit an all-time high above $US1,500 an ounce on Tuesday and silver surged on a combination of dollar decline, crude oil gains and worries about sovereign debt problems in Europe.
After being initially pressured by technical selling, bullion rose to a record for a second straight day on market jitters after Standard & Poor's on Monday revised the credit outlook of the United States to negative from stable.

US gold futures activity was quieter than usual as global stock markets steadied following the previous session's equity sell-off on S&P's move. The CBOE gold volatility index, a gauge of bullion investor anxiety, fell two per cent after surging to its highest level in four months on Monday.

US gold futures for June delivery settled up $2.20 at $1,495.10, having earlier hit a record $1,500.50 an ounce.

Spot gold gained 0.11 cents to $1,495.19 an ounce by 3:03 p.m (1903 GMT), bouncing off a high of $1,499.31. Bullion rose for a fifth consecutive session.
Gold benefited as a safe haven from economic uncertainty after fears mounted that Greece will have to restructure its debt, maybe as early as this summer, and S&P threatened to cut the United States' AAA credit rating on Monday.

Silver set a 31-year high of $43.92 an ounce, and was later up 1.3 per cent at $43.90.

Silver has outperformed gold this year, up more than 40 per cent so far against gold's 5 per cent rise. The gold/silver ratio slipped to a 28-year low below 35 on Monday.

Gold remained far below its all-time inflation-adjusted high, estimated at almost $2,500 an ounce, set in 1980, an era of Cold War tension, oil shocks and hyperinflation.

Among other precious metals, platinum slipped 0.4 per cent to $1,766.24 an ounce, while palladium dropped 1.3 per cent to $730.47.


INDUSTRIAL METALS

Copper rose close to one per cent, clawing back some ground after six straight sessions of losses, helped initially by the weaker dollar, then pushed to session highs after stronger-than-forecast US housing starts.

Investors remained nervous about debt problems in the United States and Europe, limiting the red metal's gains.

Three-month copper on the London Metal Exchange traded last traded at $9,340 a tonne at 1649 GMT (1249 EDT) from $9,225 at the close on Monday.
US copper futures were up 3.60 cents, or 0.86 per cent, at $4.23.30 per lb.

World markets bounced back from the previous session's trouncing after better-than-expected earnings results from investment banking bellwether Goldman Sachs.

In the metals markets, expectations of a supply deficit this year and an optimistic long-term demand outlook provided support.

Increasing copper inventories, however, have raised concerns about some short-term demand weakness from China.

Inventories of copper on the London Metal Exchange rose 175 tonnes to 451,950 tonnes, its highest since June, the latest data showed. Inventory levels have been on the rise since December.

Copper was in a $21.50 contango, which is a discount for cash over three-month material, versus
December's $70 backwardation, which is a premium for cash over three-month copper, the latest data showed, reflecting a dearth of nearby demand.

Tin traded at $32,600 from $32,350, while zinc changed hands at $2,330 from $2,325, Monday's close.

Inventories of zinc on the London Metal Exchange rose 21,300 tonnes to 785,600, the most recent data showed, and are now within 2,000 tonnes of 2004 peaks.

Battery material lead traded at $2,552 from $2,528. The price of metal for tomorrow versus next day delivery traded as high as $10, indicating a lack of immediately available supply.

Aluminium recovered to $2,682 from $2,674.

Nickel was bid at $25,500 from $25,500.