(Recasts, adds market comment and changes dateline to London)

By Pratima Desai

LONDON, Aug 3 (Reuters) - Copper prices rose to their

highest in more than a week on Monday as lower oil prices

alleviated anxiety about economic growth and demand while the

market also focused on dwindling inventories.

Benchmark copper on the London Metal Exchange was up

0.6% at $13,876 a metric ton by 0903 GMT after touching $13,900

a ton for its highest since July 22.

Traders said the drop in oil prices after U.S. President Donald

Trump called off a fresh attack on Iran as he sought a deal to

curb Tehran's nuclear ambitions has also eased worries about

price pressures and boosted sentiment.

"The markets continue to be headline-driven as we start the

week, with energy markets serving as the primary focal point,"

Britannia Global Markets said in a note.

"The underlying fundamental picture (for copper) looks to

remain supportive. Inventories in both China and London Metal

Exchange warehouses are in a state of depletion."

Copper stocks in LME-registered warehouses have fallen

nearly 40% since the end of May to their lowest since February

at 244,025 tons.

Producers and traders have been shipping copper to the

United States since February last year, when President Donald

Trump threatened import tariffs, creating a premium for U.S.

copper over LME prices.

The U.S. Commerce Department was due to complete a review of

the copper market by June 30, but Trump has not yet announced a

decision on tariffs.

Elsewhere, nickel prices fell after Indonesia resumed

exports of minerals containing rare-earth by-products, easing

near-term supply concerns. The three-month contract was

down 1.2% at $17,040 a ton.

Indonesia's Presidential Chief of Staff Dudung Abdurachman said

the ban applied only when rare earths were the primary product.

Traders and exporters said the clarification reduced fears

of prolonged disruption to Indonesian nickel shipments, though

officials have yet to finalise concentration limits and testing

procedures.

In other metals, aluminium gained 1% to $3,215 a

ton, zinc climbed 1.1% to $3,682 and tin was little

changed at $55,295.