Commodities Hit 2002 Lows Before Rebounding on Oil

Commodities hit 13-year lows before rebounding on Monday after Saudi Arabia's pledge to work toward crude price stability bolstered oil and France's first wheat exports to Indonesia in more than six years helped lift grains markets.

Base metals settled near multi-year lows hit while gold traded close to a 6-1/2-year trough.

Crude prices rose more than 1 percent after Saudi Arabia said it was ready to work with other oil producing and exporting countries, lending recovery hope to a market that has lost half of its value over the past year.

Despite pledges in the past that they would try and steady prices, Saudi Arabia and other big OPEC producers have kept their oil output high to maintain market share. Monday's remarks came as oil prices barely held above 2-1/2-month lows.

"The Saudis' past promises on working for price stability has led to nothing, so it wasn't surprising there was as much disbelief as initial excitement over (Monday's) announcement," said John Kilduff, partner at New York energy hedge fund Again Capital. "But all said, they are the biggest movers in OPEC, so their statement is having a positive impact."

Benchmark Brent futures were up 77 cents, or 1.2 percent, at $45.43 a barrel by 12:42 p.m. EST (1742 GMT). It rose more than $1 on the Saudi statement, then surrendered those gains to trade $1 lower before rebounding.

U.S. crude's West Texas Intermediate (WTI) futures rose 35 cents, or 0.8 percent, to $42.25 a barrel.

The rebound in oil helped the Thomson Reuters/Core Commodity CRB Index rise 0.2 percent. The 19-commodity index, a global benchmark, fell more than 1 percent earlier to its lowest since November 2002.

Wheat prices were supported by France's first exports to Indonesia since 2008-09 after private animal-feed companies were attracted by French prices.

December milling wheat, the benchmark on Paris-based Euronext futures, settled up 1 euro, or 0.6 percent, at 177.25 euros a tonne. In Chicago trading, U.S. wheat futures rose 1 percent while corn futures were up 0.7 percent.

On the London Metal Exchange, benchmark three-month copper hit a low of $4,444 a tonne, before recovering to end 2 percent down at $4,490.

LME nickel slid more than 6 percent to a 2003 low, hitting $8,175 a tonne, and trading last at $8,335. Zinc slid 3 percent to $1,519, having dropped below $1,500 last week, the first time since 2009.

Losses in nickel and zinc reflect weakness in China's vast steel sector.


(By Barani Krishnan; Additional reporting Amanda Cooper, Manolo Serapio Jr and Eric Onstad; Editing by Bernadette Baum)