COMMODITIES-US oil up on pipeline news; copper up too, gold down

Thu Jan 24, 2013 5:42pm EST

* US crude up as Seaway pipeline expected to be restored

* Copper rises after strong US, China manufacturing data

* Cocoa at 7-month bottom, soybeans at one-week low

* Natgas biggest loser for the day on CRB

By Barani Krishnan

NEW YORK, Jan 24 (Reuters) - U.S. oil prices rose on Thursday, as news that a troubled crude pipeline could be restored soon triggered a rebound from the previous session's losses, while copper closed higher due to strong global economic data.

Gold notched its sharpest drop in three weeks after failing several times to break above technical resistance.

In crop markets, cocoa hit seven-month lows on worries of thinning demand after chocolate-makers finished preparations for Valentine candy.

Soybean prices fell to a one-week low on forecasts for beneficial rain in Argentina's crop belt. Wheat slid for a third consecutive session.

The Thomson Reuters-Jefferies CRB Index, a global indicator for commodities that tracks 19 markets, settled a touch higher after the rise in U.S. crude -- the CRB's biggest component -- offset price drops for other commodities.

Natural gas was the CRB's biggest loser, falling nearly 3 percent on profit taking despite cold weather that lifted heating demand in most of the eastern United States.

US OIL UP ON PIPELINE NEWS

U.S. oil prices rose on from expectations that the vital Seaway pipeline -- that pumped crude from the Cushing, Oklahoma, delivery point in the Midwest to the Gulf Coast refining center -- would be up and running within a week.

Shippers received notification on Wednesday that the 400,000 barrel-per-day (bpd) line had cut rates to 175,000 bpd, raising concerns that crude supplies will swell in the country's Midwest.

U.S. crude's front-month contract settled up 0.8 percent at $95.95 a barrel, rebounding from Wednesday's 1.5 percent fall.

London's Brent crude, which traders said more accurately reflects global oil demand, closed up 0.4 percent at $113.28 a barrel, after hitting a 3-month high at $113.65.

COPPER UP ON ECONOMIC DATA, GOLD DOWN

Copper prices rose after manufacturing in China and the United States grew this month at the fastest pace in about two years, amid data suggesting higher German growth that boosted hopes for a swifter euro zone recovery.

New claims for jobless benefits dropped to a five-year low last week, giving surprisingly strong signals on the economy's pulse.

London's benchmark three-month copper closed at $8,095.5 per tonne from a close of $8,103 a tonne on Wednesday.

Gold posted its biggest one day drop in three weeks after repeatedly failing to break above $1,700, a key level for market bulls.

The spot price of bullion hit a low of $1,664.69 at just above its 200-day moving average. It was down 1 percent, hovering at around $1,668 an ounce.

Investor confidence in gold was further eroded when major bullion bank HSBC said in a note that it had halved its exposure to gold, shifting its inflation hedge to U.S. Treasury Inflation-Protected Securities (TIPS).

A recovery in gold prices earlier this week ran out of steam as the metal hit strong overhead resistance between $1,690 and $1,700. Gold has failed to breach that level in the last five sessions in a row.