Mar 02, 2012 NEW YORK (Dow Jones)--Copper futures hovered near unchanged Friday amid broad market caution in the wake of a sudden spike in crude oil prices and a stronger dollar.
The most actively traded contract, for May delivery, was recently down 1.00 cent, or 0.3%, at $3.9215 a pound on the Comex division of the New York Mercantile Exchange.
Copper futures wavered in a narrow range of about 1% Friday, as caution gripped markets in the wake of two volatile trading sessions which saw prices bounce as much as 4% from low to high.
Analysts noted that Thursday's pop in crude oil prices, triggered by reports of an explosion of a key Saudi Arabian pipeline, which was later denied by Saudi authorities, further damped investor interest in the industrial metal. Oil futures surged to $110.55 a barrel on the news but prices retreated after the explosion was denied.
The violent market action rattled investors, with some traders preferring to stay on the sidelines ahead of the weekend.
"It is likely that equity markets will again lend direction to what looks like a rather confused and apathetic metals market," said Leon Westgate, base metals analyst with Standard Bank, in a note.
The Standard & Poor's 500 index was recently down 0.2% at 1371.56.
A stronger dollar, which rallied against the euro, put some pressure on copper prices. Copper futures are denominated in dollars and tend to appear more expensive to investors who hold other currencies when the greenback strengthens.
Copper stored on the Shanghai Futures Exchange climbed to a record 221,487 metric tons Friday, from 216,086 tons a week earlier, according to weekly data from the exchange.
The increase suggests that "domestic Chinese demand still remains weak and has yet to reach a turning point," Westgate said.