METALS-Copper bounces off lows; oil-driven econ fears linger

* Copper higher, but inflation fears from high oil weigh

 * Demand-sapping effect of soaring oil and grains worries

 * Focus on oil supplies from Libya, risk of spreading
protests

 * Coming Up: U.S. Durable Goods orders 1300 GMT

 (Updates quotes, adds prices and details)	

 By Nick Trevethan	

 SINGAPORE, Feb 24 (Reuters) - London copper rose 1 percent
on Thursday, trading above $9,500, after dipping to its lowest
in nearly a month in the previous session, and pressure remained
on base metals from the economic threat posed by surging oil
prices.	

 Three-month copper on the London Metal Exchange rose
$90.75 to $9,515.75 a tonne by 0319 GMT, after having touched
$9,365, a near one-month low, in the previous session.	

 Shanghai's most active May copper contract rose 0.4
percent to 71,970 yuan.	

 "Metals have decoupled from energy in recent days and the
market is obviously worried about the inflationary impact of oil
prices," said Edward Meir, analyst at MF Global in New York.	

 "Energy prices are going higher with daily news of falling
exports from Libya, but something has to give - either Gaddafi
will be overthrown, which seems likely or the Saudis will pump
more oil. Either way we should see a dip in oil and rallies in
metals."	

 U.S. crude oil futures rose more than $1 on Thursday, on
mounting fears that unrest in Libya could spread to other oil
producers in the Middle East and North Africa, while Brent
 touched a 2-1/2 year high of $113 a barrel.	

 The turmoil in Libya continued, as thousands of Libyans
celebrated the liberation of the east of the country from the
rule of Muammar Gaddafi, who has vowed to crush the revolt.
  	

 Disruption stemming from the revolt in Libya has cut more
than a quarter of output from the world's No. 12 exporter. At
least 400,000 barrels per day of the country's 1.6 million
output is shut, according to Reuters calculations.
 	

 The dollar index edged down to a three-week low on
Thursday, as the safe-haven demand triggered by the crisis in
Libya drove investors to the Swiss franc while the greenback
appeared to lose its luster. 	

 In other metals, LME aluminium rose $2 to $2,532,
and prices in Shanghai were little changed.	

 "These are pivotal times for markets. I am very worried
about what higher energy and food prices will mean for
disposable incomes from China to America," a trader in Singapore
said.	

 "If we see sustained, higher prices for oil and other
staples, it has the potential to severely limit the demand
growth that the rally in copper especially was built upon."	

 Technically, copper's recovery may be limited with a rebound
capped below $9,567, according to Reuters analyst Wang Tao.	

 He said a Fibonacci retracement analysis on the fall from
$9,892.74 to $9,365 reveals the rebound may end around the 38.2
percent level. 	

     	
 Base metals prices at 0319 GMT
 Metal              Last       Change   Pct Move YTD pct chg
 LME Cu            9515.75     90.75     +0.96     -0.88
 SHFE CU FUT MAY1    71970       270     +0.38      0.17
 LME Alum          2532.00      2.00     +0.08      2.51
 SHFE AL FUT MAY1    17000       -10     -0.06      0.95
 HG COPPER MAR1     431.90     4.35     +1.02     -2.71
 LME Zinc          2495.00      0.00     +0.00      1.67
 SHFE ZN FUT MAY1    19445       115     +0.59     -0.15
 LME Nickel       28495.00   -205.00     -0.71     15.13
 LME Lead          2545.00      6.00     +0.24     -0.20
 LME Tin          31700.00    200.00     +0.63     17.84
 LME/Shanghai arb^          1236
 Dollar/yuan          6.5753 \ 6.5757
 Shanghai and COMEX contracts show most
  active months
 ^ LME 3-m copper in yuan, including 17 pct
  VAT, minus SHFE  third 
 month
 	
	
 (Editing by Himani Sarkar)	

(Source: http://af.reuters.com/article/metalsNews/idAFL3E7DO05220110224)