"More than anything else, we think the metal markets are becoming unhinged by the goings-on in the oil markets. In these times of intertwined markets and huge fund flows, we find the correlations between various markets to be very high, and when a critical market like energy starts selling off, there are bound to be ramifications on base metals, as funds pare positions and/or adjust margin requirements," said Edward Meir, metals analyst with Man Financial.
By 10:28 a.m, EDT (1428 GMT), copper for December delivery was up 0.75 cent at $3.3805 a lb on the New York Mercantile Exchange's COMEX division, ranging between $3.33 and $3.43.
Technicians pegged support in December copper at $3.3350, and then at $3.2650, while resistance was seen at the $3.50 level.
Spot September gained 3.95 cents at its morning peak at $3.43.
COMEX copper volume at 10:00 a.m. was estimated at a modest 3,000 lots.
"The volatility in this market continues to weigh on the upside. I think a lot of guys are scratching their heads, wondering where does it go from here," said one COMEX floor dealer.
Fundamentally, the copper market remains extremely tight, due to low warehouse inventories and the possibility of further supply disruptions due to upcoming contract renewals at major mines at year-end.
Talk of increased Chinese demand picking up in the fourth quarter of the year was another factor in propelling further price strength, traders said."It's still a very tight market and that still has room to get tighter, especially if China does come back in...and that is the wild card," said one.
Chinese industrial output for August grew 15.7 percent from a year earlier, compared with 16.7 percent in July, the National Bureau of Statistics said on Wednesday.
Meanwhile, world refined copper production exceeded consumption by 13,000 tonnes between January and June this year, against a deficit of 257,000 tonnes in the same year-ago period, the International Copper Study Group (ICSG) said in its latest monthly bulletin.
On the production front, Chile's Codelco, the world's largest copper company, reached a new, four-year wage deal with the supervisors union at its El Salvador division earlier in the week.
The successful deal, reached ahead of the Oct. 31 date for the contract to expire, is a positive start for state-owned Codelco, which faces much tougher negotiations at its two largest divisions, at Andina and Chuquicamata, Codelco Norte.
London Metal Exchange-monitored warehouse stocks rose 2,200 tonnes to 122,050 tonnes on Wednesday, while COMEX inventories rose 1,567 short tons to 14,897 tons in Tuesday's report.
LME copper for three month delivery last traded at $7,440.50 a tonne, down $119.50 from Tuesday's kerb close.
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