US copper futures followed a rebound in crude oil Wednesday morning to recoup early losses which extended from Tuesday's correction, traders said. "This darn market is just keeping an eye on whatever the flavour of the month is and crude oil seems to have taken a rather substantial lead in pulling copper around these days," a trader said.
At 1340 GMT, benchmark copper for May delivery on the New York Mercantile Exchange's COMEX division was up 40 cents, or 0.13 percent, at $3.0615 a lb, below the session high of $3.0785. It had slid 44 cents, or 1.4 percent, to a session low of $3.0135 as US Federal Reserve chairman Ben Bernanke prepared to address a congressional committee on the state of the economy. The Fed chairman is expected to be asked about the interest rate policy and subprime mortgage market, two key worries for investors.
COMEX traders said data issued Wednesday showing a drop in the latest US mortgage applications also kept a lid on copper prices as it indicated a weak market for new houses, one of the lifelines of the copper business.
US crude oil was up $1.62, or 2.6 percent, at $64.55 a barrel by 1400 GMT as the market remained on the edge over simmering tensions between Iran and the West. Oil spiked $5 to six-month highs overnight on a rumour, quickly dismissed by the United States, that a US naval vessel had clashed with Iranian forces. Britain denied another market rumour that it had sent troops to release 15 British military personnel being held in Iran.