A summary of trading in key commodities markets overseas:
World oil prices have fallen sharply as the market seems to do a double-take on a US report showing US crude oil stockpiles have hit a fresh record.
The US benchmark, West Texas Intermediate for April, dived $2.82 to close Thursday at $48.17 a barrel on the New York Mercantile Exchange, more than wiping out the previous day's rebound.
European benchmark Brent North Sea crude for April delivery sank $1.58 to $60.05 a barrel in London.
Both futures contracts had surged on Wednesday after the US Department of Energy reported US crude inventories had increased by a much-bigger-than-expected 8.4 million barrels in the week ending February 20, to a record 434.1 million barrels.
For analysts, the market rally was due to traders focusing on the DoE report's positive elements for demand: falling petrol and distillates stockpiles.
But on Thursday the market was back to weighing the basic fundamentals of global oversupply, made worse by high US production and weak demand in a slowing world economy.
"I think a lot of it is just a delayed reaction to yesterday's (DoE) reports. We had a nice rally, but I don't think yesterday's numbers were bullish at all," said IAF Advisors analyst Kyle Cooper.
Crude oil has lost about 50 per cent of its value since June.
"The global petroleum market may be in the process of rebalancing as low prices inhibit supply and encourage demand, but the market still has a clear current surplus, with much of the excess flowing into US inventories," said Tim Evans of Citi Futures.
Gold pared gains after stronger-than-expected US data lifted the dollar and impetus from Chinese buying petered out, but it remained higher after the Federal Reserve indicated this week that it was in no rush to raise interest rates.
The dollar rose against a currency basket as data on US durable goods orders in January beat forecasts, boosting confidence in business activity despite worries of the recent surge in the dollar hurting exports.
That weighed on gold, which is priced in the US unit.
Spot gold was up 0.3 per cent at $US1,208 an ounce. Earlier it hit a session high of $US1,220.00 above the 100-day moving average at $US1,216.20, before retreating as the dollar firmed.
"The market feels a bit top heavy," MKS head of trading Afshin Nabavi said. "We've had good buying of physical gold from the Far East as China opened up after the Lunar Week holiday, but above $US1,210-1,212, that stopped."
Gold prices have fallen around 10 per cent over the last year, largely due to the prospect of higher US interest rates, which would increase the opportunity cost of holding non-yielding bullion while boosting the dollar.
The metal rose strongly earlier this week after Fed chair Janet Yellen indicated that the US central bank was in no rush to hike interest rates, leading some analysts to shift expectations for the first US rate hike since 2006 to September or later this year.
"The combination of China returning, Yellen pushing the can further out, bond yields lower and exchange-traded product demand picking up has helped create a floor (for gold)," Saxo Bank's head of commodity strategy Ole Hansen said.
US gold for April delivery rose 0.7 per cent to settle at $US1,210.10 an ounce.
"The bulls in the market are defending the $US1,200 gold. I think this is technical," said Frank Cholly, senior market strategist for RJO Futures in Chicago.
Copper jumped to the highest in six weeks on Thursday as bearish investors scrambled to buy futures to close out their positions after Chinese trading resumed following a holiday break.
The rest of the LME complex also had a firm undertone thanks to the resumption of physical buying in China, combined with firmer oil prices and decent economic data, analysts said.
The gains were curbed, however, as stronger than expected data on US durable goods orders in January lifted the US currency, making metals priced in the dollar more expensive to buyers using other currencies.
Three-month copper on the London Metal Exchange CMCU3 reached a session peak of $US5,944 a tonne, the highest since Jan. 13, but pared gains later.
Copper, which failed to trade in closing open outcry activity, was last bid at $US5,888, up 2.2 per cent, after ending slightly weaker in the previous session.
"I think the real reason we're getting this renewed burst of short-covering is that Chinese traders have returned from the new year holiday, said Guy Wolf, global head of market analytics at Marex Spectron.
"There's still a big short base out there.
It's not as big as it was at the beginning of February, but it's still sizeable.
Marex Spectrons Copper Sentiment Index, which is derived from an algorithm using data from three exchanges, showed a recovery this week to minus 82.4, against a low of minus 95.7 in late January, the same level as in 2008.
"Overall the macro situation is okay.
It's not amazing, but it's fine. This is not 2008, Wolf added. Traders said there were initial signs of an uptick of copper consumption in China, the world's top user of the metal, ahead of the second quarter, typically the strongest demand period. Bonded copper premiums were up $US2.50 to $US90-$US95.
"China should be roaring back to life. The price is cheap and they have a big grid build-out coming up," said Daniel Morgan of UBS in Sydney.
The state power sector is a major copper buyer in China, which accounts for 45 per cent of global copper demand.
Highlighting prospects of tighter than expected supply, a drought in Chile is hampering copper production.
LME aluminium closed up 0.6 per cent at $US1,805 a tonne, zinc CMZN3 rose 0.6 per cent to $US2,071 and lead CMPB3 finished 0.6 per cent firmer at $US1,760.