COMMODITIES-Metals, oil rally on ECB rate cut; crops jump, natgas dives

Thu May 2, 2013 4:12pm EDT

Related Topics

* Brent oil gains more than Wednesday loss, near $103
    * Copper rises too but still below $7,000
    * Gold futures makes up almost all of Wednesday's decline
    * Arabica coffee up most in 8 months on technical buying
    * Natgas biggest loser of the day after inventory surge

 (New throughout, updates prices and market activity)
    By Barani Krishnan
    NEW YORK, May 2 (Reuters) - Oil jumped about 3 percent on
Thursday and gold and copper prices rose too as the euro fell
after a rate cut, boosting risk appetite across markets and
helping commodities rebound from their weak start for May.
    In agricultural commodities, arabica coffee surged 
2.5 percent on heavy technical buying for its sharpest one-day
gain in eight months. Corn rose 2 percent on U.S.
planting delays.  
    Natural gas slid 7 percent for its largest decline in 9
months, after weekly inventory builds for U.S. gas came in way
above market expectations. 
    The Thomson Reuters-Jefferies CRB index, a global
indicator for commodity prices, settled up 1.2 percent. It had
fallen 1.7 percent on Wednesday, in the first session for May.
    The broad-based rebound came after the European Central Bank
cut its benchmark refinancing rate by 25 basis points to a
record low of 0.5 percent, pushing the euro down against the
dollar and yen. 
    The ECB also promised to provide euro zone banks as much
liquidity as they needed and help smaller companies get access
to credit to prevent a recession. 
    Analysts said the action could spur traders and investors to
put on more risk, but cautioned that many remain fearful of
economic headwinds ahead.
    A business survey showed on Thursday that factory activity
in Europe's largest economy, Germany, fell for a second month in
April and at a faster pace than in March. That was on the heels
of Wednesday's data showing a slowdown in U.S. and China
manufacturing.  
    
    "A LOT OF DAMAGE"
    "A lot of damage has been done technically and
psychologically, so it's hard to be confident about a
significant bounce" in sentiment, said Stephen Briggs, a metals
strategist at BNP Paribas in London.
    May is usually a time for weak prices and activity in
financial markets, including commodities, as traders go on
holiday with the advent of warmer weather in the United States
and other parts of the northern hemisphere. That weakness is
sometimes exacerbated by concerns about the economy, like now,
and how demand for raw materials would fare.
    The CRB lost nearly 11 percent in May last year and almost 6
percent the previous year.
    Benchmark Brent crude oil out of London closed up
nearly 3 percent at $102.85 a barrel. The gain was the market's
biggest in five months and outstripped Wednesday's 2.4 percent
loss. With the rebound, Brent is now down about 7.5 percent on
the year.
    U.S crude climbed almost 3.3 percent to settle at
$93.99. It lost 2.6 percent in the previous session. 
    "Yesterday's sell-off was a bit overdone," said Jefferies
Bache oil broker Christopher Bellew, who expects Brent to
gradually work its way back to between $103 and $104.
    "I am not quite as pessimistic as everybody else," Bellew
said. "In general, the Chinese economy is growing and the
American economy is better, but sometimes it doesn't happen as
quickly as people expect."
    Copper recouped a chunk of what it lost in the previous
session, although the top industrial metal remained below the
$7,000-a-tonne price critical to market bulls.
    Three-month copper on the London Metal Exchange
closed up nearly 1 percent at $6,848 a tonne. It had slid 3.7
percent on Wednesday, for biggest one-day loss in over a year.
 
    U.S. gold futures for June delivery settled up 1.5
percent at $1,467.60 an ounce, after Wednesday's decline of 1.8
percent. 
    
 Prices at 3:54 p.m. EDT (1954 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    94.00     2.97   3.3%    2.4%
 Brent crude                102.80     2.85   2.9%   -7.5%
 Natural gas                 4.025   -0.301  -7.0%   20.1%
 
 US gold                   1467.60    21.40   1.5%  -12.4%
 Gold                      1466.91     9.75   0.7%  -12.4%
 US Copper                  310.45     2.45   0.8%  -15.0%
 LME Copper                6848.00    53.00   0.8%  -13.7%
 Dollar                     82.207    0.723   0.9%    7.1%
                             
 
 US corn                    697.50    10.25   1.5%   -0.1%
 US soybeans               1441.00     3.50   0.2%    1.6%
 US wheat                   718.75     8.25   1.2%   -7.6%
 
 US Coffee                  139.45     4.75   3.5%   -3.0%
 US Cocoa                  2414.00    -1.00   0.0%    8.0%
 US Sugar                    17.60     0.27   1.6%   -9.8%
 
 US silver                  23.830    0.487   2.1%  -21.2%
 US platinum               1500.20    30.70   2.1%   -2.5%
 US palladium               693.30     8.55   1.2%   -1.4%
 
 (Editing by David Gregorio)
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