LONDON (Reuters) – Oil steadied below $70 a barrel and copper and gold edged up on Tuesday, stemming a sell-off the previous day that sent prices across commodity markets tumbling from record or near-record highs.
Oil and gold ticked up after U.S. data showed producer prices, excluding food and energy, rose less than expected last month, causing speculation the Federal Reserve may be able to end its campaign of interest rate increases.
“Crude prices are rebounding slightly,” said Alexander Kervinio, an analyst at SG CIB Commodities in Paris. “I would expect prices to move back above $70. Investors may want to re-enter the market.”
U.S. crude oil was up 32 cents at $69.73 a barrel by 1350 GMT, after falling as low as $68.51 earlier and plunging $2.63 on Monday. London Brent crude was up 17 cents to $69.84 barrel.
Oil prices slid on Monday as investors feared a rally that has taken many commodities to or near record highs in 2006 may slow demand for oil and economic growth.
London copper was volatile on Tuesday after tumbling nearly 9 percent on Monday and dealers said uncertainty would be the key near-term feature of the market.
LME copper for delivery in three months was $8,250/$8,300 a tonne by 1247 GMT, up from Monday’s close of $8,190. Earlier that day, copper slumped 8.8 percent to $7,700.
U.S. gold futures reversed an early decline to trade moderately higher on Tuesday following the U.S. data.
By 8:39 a.m. EDT, gold for June delivery was up $4.00 or 0.6 percent at $689 an ounce, which was near the top of a $675.50-to-$690 session range.
The metal fell more than 4 percent in the U.S. on Monday.
Oil in New York also fell on Friday after reports that high prices were hitting global fuel demand and consumer confidence.
The International Energy Agency, adviser to 26 industrialized countries, said on Friday that prices were slowing energy use and cut its 2006 forecast for demand growth by 220,000 barrels per day to 1.25 million bpd.
Oil in the U.S. hit a record high of $75.35 last month because of supply losses in Nigeria, tension over Iran’s nuclear work and more buying of commodities by funds seeking to beat returns of other assets like equities.
Attention on Wednesday will turn to the latest reports on U.S. gasoline supply, a concern for oil traders as the peak demand summer driving season looms in the world’s top consumer.
Inventories were forecast to have risen again last week due to faltering demand, a Reuters poll of analysts showed, ahead of Wednesday’s release of the latest government report.
U.S. gasoline pump prices jumped last week to the third-highest ever, a national pump price of $2.95 a gallon, the government said on Monday.