Commodities: Copper flies north amid Chile mine strike as crude falls after OPEC update

Industrial metals flew higher on Monday with copper a stand-out performer thanks in part to a mine strike in Chile, while crude was under pressure after OPEC updated on its output cut.

At 15:23 GMT, on Comex, gold was down 1.04% to $1223.10 an ounce, while silver fell 0.6% to $17.83 an ounce and copper rose 0.83% to 279.10 cents a pound.

On London Metals Exchange, three-month copper rose 4.6% to $6090 a MT, while zinc rose 3.32% to $2924 a MT, tin added 2.1% to $19,475 a MT and aluminum firmed 1.3% to $1874 a MT.

"Amongst the main drivers has been a surge in the price of copper, pushing above its 2016 highs as a strike at Chile's Escondida mine continued to push up prices," said Michael Hewson, chief market analyst at CMC Markets UK.

"Copper prices haven't been the only driver, with China iron ore prices also rising sharply, over 10% in the last couple of days to $92.23 from $83.84 on Thursday, to their highest levels since August 2014," added Hewson in a statement.

Meantime, Nymex-traded West Texas Intermediate was down 1.47% to $53.07 a barrel, while Intercontinental Exchange-quoted Brent was down 1.59% to $55.80 a barrel.

The fall in the black-liquid's price came as OPEC encouraged suppliers to meet their production-paring pledges of late 2016 to ease the global glut, even as uncertainty lingers over exactly how much Saudi Arabia has reduced its outflow.

OPEC said it was 92% compliant with its November 2016 promise to lower oil output by 1.2m barrels a day. The group's output fell 890,200 bopd, on the month, to 32.139m in January.

FXTM Research analyst Lukman Otunuga said WTI Crude remained entangled in a fierce tug of war as optimism over OPEC cutting oil production coupled with fears of US shale pumping oil incessantly kept investors on edge.

"While last week's unexpected draw in US gasoline inventories bolstered oil as optimism rose over demand remaining healthy in the world’s largest oil market, fears of US shale impacting the OPEC agreement capped oil prices below $54," Otunuga opined.

"Oil markets may be injected with extreme levels of volatility this quarter if fears resurface over the oversupply in the global markets making a return," he added.

Hewson further added that 90% compliance with the recent output cuts had not been enough to help oil prices higher.

"The fact remains that US inventories surged last week, and that was even before another jump in the US rig count on 10 Feburary to 741, from 729 the previous week."

Finally, among agriculturals, Chicago Board of Trade-priced corn was flat at 374.50 cents a bushel, while wheat fell 0.45% to 447 cents a bushel.

ICE-priced cocoa shed 1.73% to $1928 a MT, and cotton No.2 rose 0.78% to 77.69 cents a pound. Live cattle rose 0.02% to 113.18 cents a pound.