AAP

ENERGY

Oil prices hovered below $92 a barrel on Thursday after signs of improving US demand and rising interest from financial investors pushed crude to a two-year high.

Benchmark oil for February delivery was down 65 cents at $US91.21 a barrel in mid-afternoon trading on the New York Mercantile Exchange (NYMEX). Crude gained 75 cents to settle at $US91.86 on Wednesday, the highest settlement price since October 2008.

A report on jobs that showed more people filing for unemployment aid in the US weighed on the dollar Thursday. The euro got a boost after successful bond auctions in Portugal and Italy helped calm some investors worried about Europe's debt crisis.

In other Nymex contracts for February delivery, heating oil was unchanged at $2.6209 a gallon, and gasoline futures were unchanged at $2.4620 per gallon. NaturaL gas prices fell 10 cents to $4.425 per 1,000 cubic feet.

In London, Brent crude fell 27 cents to $US97.30 a barrel on the ICE Futures exchange.

PRECIOUS METALS

February gold settled $1.20 higher at $US1,387 per fine ounce on the Comex division of the NYMEX.

March silver was 28.2 cents lower at $US29.263.

INDUSTRIAL METALS

Copper fell on Thursday, after two days of gains, on concerns that demand may wane in China because the top metals consumer is approaching its New Year holiday and also may further tighten monetary policy.

Benchmark copper on the London Metal Exchange closed at $9,620 a tonne, down from $9,685 at the close on Wednesday.

The metal used in power and construction hit a record high of $9,754 a tonne on Jan 4.

The outlook for copper remains positive due to expectations of a supply deficit this year.

Canada's Inmet Mining Corp said it expected to produce 33 per cent more copper in 2011, while trimming its zinc production by 3 per cent, across three of its assets.

Chile's state copper giant Codelco will invest over $16 billion between 2011-2015 and expects copper prices to remain strong in the long-term, the miner said.

Stocks of copper in London Metal Exchange fell 825 tonnes to 377,350 tonnes. Since Dec 9 they have risen about 30,000 tonnes, raising some concerns over demand. Looking further back, however, analysts underlined that stocks were down 30 per cent since they hit a 6 1/2 year high in mid-February 2010.

As stocks have climbed, recent worries about nearby supply have eased, and so too, for now, has the premium for cash copper over the three-month contract at $5.50 a tonne. Supply worries had pushed the backwardation to around $70 a tonne in mid-December.

Aluminium stocks, on the other hand, continued a recent rise and last reached 4,434,950 tonnes after an inflow of 26,600 tonnes into LME warehouses. Aluminium ended at $2,482 from $2,505 a tonne.

Zinc closed at $2,462 a tonne from $2,479 and battery material lead was at $2,635 a tonne from $2,661.

Tin was at $26,850 a tonne from $27,000.

Nickel was at $25,550 a tonne from $25,800.