LONDON, Feb 28 - Copper rose on Monday, extending a rally on Friday, after an earthquake struck top producer Chile and the dollar fell, but gains were capped by concerns about the effects rising oil prices will have on economic growth.
Three-month
copper on the London Metal Exchange rose to $9,795 a tonne by 1052 GMT from $9,750 at the close on Friday, when it rallied almost 3 percent.
A strong quake of 6.0 magnitude struck Chile on Sunday south of Concepcion, but there were no reports of damages or injuries and no risk of a tsunami.
"Although there was no damage, it underlined the fact that Chile is a major copper producer and a year ago there was a powerful earthquake that disrupted copper production," Credit Agricole analyst Robin Bhar said.
On Feb. 27 last year Chile was hit by a massive earthquake and subsequent tsunami that killed more than 500 people and caused some $30 billion in damage.
Bhar said copper was also still feeding off good consumer confidence data in the United States last week and oil prices coming off $120 a barrel.
"It's those factors which helped to cushion any fallout from the concerns about political turmoil in the Middle East and North Africa," he said.
"But it's a fragile recovery we're seeing, which could easily not last long if the oil price moved strongly back up again."
Brent crude oil brushed against $120 a barrel last week on concerns about security of supply from the Middle East after uprisings in Libya dramatically cut exports from North Africa.
Brent futures for April rose $1.54 to $113.68 a barrel by 0850 GMT on Monday. U.S. crude rose $1.10 at $98.98 a barrel. Both benchmarks posted their highest weekly close in two-and-a-half years last week.
The dollar hit a 3-1/2-month low against a currency basket on Monday, with the U.S. currency coming under broad selling pressure as higher oil prices fuelled concerns about U.S. growth. A softer dollar makes metals cheaper for holders of other currencies.
