Feb 28, 2011 (Dow Jones)-- Copper prices climbed higher on thin trading volumes Monday, as market participants weighed the likely impact of higher oil prices and simmering unrest in the Middle East.

The front-month contract, for March delivery, settled up 1%, or 4.2 cents, at $4.4780 a pound.

The most actively traded contract, for May delivery, settled up 0.9%, or 4.15 cents higher, at $4.4965 a pound on the Comex division of the New York Mercantile Exchange. The May contract is also the most widely held.

Copper's Monday gains came amid sharply lower trading volumes. The combined trading volume of all Comex copper contracts barely breached 30,000 trades during the Comex floor session. Last week combined trading volumes were between 60,000 and 90,000 trades a day. Thinner trading volumes can affect price discovery, as individual trades may have an outsized impact on the market.

Traders noted that other commodity markets were also seeing quiet trading Monday, with subdued activity in gold and oil markets.

"We're not seeing volume anywhere, so it seems like people are wanting to sit back and fully evaluate what's going on in the Middle East," said Bill O'Neill, a principal with LOGIC Advisors.

The month-long upheaval in the Middle East has made for volatile commodity prices as the oil-producing region struggled with political unrest. Violent clashes between anti-government protestors and security forces in Libya had interrupted crude oil exports from the key producer last week, causing oil prices to rally.

Civil unrest has also spread to Oman, where demonstrators are calling for better pay and work opportunities, and Oman, where the Sunni ruling family is under pressure to deliver more opportunities and better representation to the Shiite-majority population.

Copper posted sharp declines amid rocketing crude oil prices last week, as investors worried that higher energy prices would stall the global economic recovery. As oil receded below the $100 a barrel mark, however, some of those fears appeared to ease Monday.

"Any time you're less worried about oil, you're more hopeful about the global economy," said Bart Melek, senior commodity strategist at TD Securities.

Upbeat economic data helped copper traders keep their positive sentiment. The Institute for Supply Management-Chicago said its business barometer rose to 71.2 from 68.8 in January, the highest reading since July 1988. Economists expected the indicator to slip to 67.4.

The rise in business activity is a boon for copper, which is widely used in manufacturing for electrical wiring and copper tubing.

Copper futures also got a boost from China, the world's top copper consumer. Chinese refined copper consumption rose 5.1% to 7.92 million metric tons in 2010, the National Statistics Bureau said Monday.

"Every time we get data from China it seems that copper consumption continues to be very strong and all the gloom and doom people forecasted hasn't materialized," said O'Neill.