* Copper down 2 pct on euro zone services data
* Natgas jumps 4 pct on cooler U.S. temperatures
By Barani Krishnan
NEW YORK, April 23 (Reuters) – Copper prices fell about 2
percent o n M onday along with most commodities after dismal data
on the European services sector dampened hopes of the euro
zone’s recovery, while forecasts of a cold snap boosted natural
gas and grain markets.
Oil ended little changed after production concerns over
North Sea crude and worries about supply disruptions linked to
Iran helped the market pare early losses caused by the weaker
euro zone sentiment.
Grains markets bucked the trend, with both corn and
wheat prices rising on forecasts for another cold snap in
weather along the U.S. crop belt in the Midwest. Natural gas was
another outperformer, with prices bouncing off 10-year lows, on
signs of the turning weather.
The Thomson Reuters-Jefferies CRB index, a global
commodities benchmark, fell about a quarter percent after 11 of
the 19 markets tracked by the index settled down. (Graphic: http://link.reuters.com/bas77s)
Orange juice was the CRB’s biggest loser for the day,
sliding nearly 6 percent. Natural gas was its biggest
gainer, rising above 4 percent.
Copper sank in a broad-based retreat from riskier assets as
political uncertainties in France and the Netherlands added to
growing fears that the euro zone’s fiscal troubles could spread
to countries once perceived to be safe from the crisis.
Prices of the economically sensitive red metal dropped after
data showed euro zone business woes deepened at a faster pace
than expected in April. The Purchasing Managers Index for the
bloc’s dominant service sector fell to a five-month low, against
forecasts that it rose.
A separate PMI for Germany showed that the export-oriented
manufacturing sector of Europe’s largest economy shrank at the
fastest pace in nearly three years in April.
“Financial markets are in panic mode at the moment, and that
is putting pressure on assets perceived as risky such as base
metals,” said Peter Fertig, consultant at Quantitative Commodity
Research.
“The reaction in markets has been overdone and is not based
on fundamentals, for example in China, the PMIs have been
improving. But because the markets have been panicking about the
situation in the euro zone for some time, we could still see
some volatility ahead.”
The London Metal Exchange’s benchmark three-month copper
futures contract shed $145, or 1.7 percent, to finish at
$8,045 a tonne. It touched an intraday low at $7,977.25.
U.S. gold futures’ benchmark June contract settled
down $10.20, or 0.6 percent, at $1,632.60 an ounce, extending
last week’s 1 percent decline.
Natural gas futures rose 4 percent, climbing for a second
straight trading day, after mild spring weather and persistent
concerns over record-high supplies pushed prices to their lowest
in more than 10 years last week.
Those who sold down the market last week bought back on
Monday as cooler temperatures descended on the U.S. Northeast
and its neighboring regions.
Front-month May natural gas futures on the New York
Mercantile Exchange rose 8 cents, or 4.15 percent, to
settle at $2.007 per million British thermal units, settling
above $2 for the first time in a week.
“After being sold relentlessly over the past several months,
breaking the psychological $2.00 per mmBtu level last week,
natural gas prices reversed course on short covering and profit
taking,” said Chris Jarvis, president at Caprock Risk
Management.
(Editing by Marguerita Choy)
