* Prices swing on Rusal sanctions speculation
* Zinc recovers losses to close unchanged
* Most metals supported by dollar weakness (Recasts with closing prices)
By Eric Onstad
LONDON, April 26 (Reuters) - Aluminium ended higher on Thursday after lurching up and down as investors speculated about whether U.S. sanctions on Russian producer Rusal would be lifted.
Morning losses were recovered as investors bet that Russian billionaire and Rusal shareholder Oleg Deripaska would not divest his holding and that U.S. sanctions would remain in place on one of the world's biggest aluminium producers, keeping supply tight.
Reuters quoted a Russian Finance Ministry source on Wednesday as saying Deripaska wanted to keep his assets.
Three-month LME aluminium closed 1.3 percent up at $2,275 after falling to $2,195 and later jumping more than 3 percent to an intra-day peak of $2,316.
"Here we go on the aluminium rollercoaster again," said Oliver Nugent, commodities strategist at ING in Amsterdam.
The metal is down about 18 percent from the $2,718 seven-year high hit on April 19 after the original sanctions announcement raised concern over potential aluminium shortages.
*LME ZINC: Benchmark LME zinc initially fell because of rising inventories but closed unchanged at $3,135 a tonne.
In February zinc touched its highest in more than a decade at $3,595.50 on supply concerns after closures and suspensions of big mines in recent years, but many operations have now resumed production.
*ZINC INVENTORIES: Zinc stocks in warehouses certified by the London Metal Exchange MZNSTX-TOTAL have jumped 26 percent this week, rising by a further 18,675 tonnes on Thursday.
The amount of cancelled inventory - stock earmarked for delivery - was very low at 5.4 percent, LME data showed.
"You had deeply held trader stocks and those stocks have now been unwound, so that makes metal more available and the tightness is coming off the boil," said Nugent.
* DOLLAR: Most base metals ended in positive territory after the dollar weakened. That occurred after European Central Bank President Mario Draghi presented a relatively confident outlook for the euro zone economy, boosting the euro. A weaker dollar makes metals cheaper for holders of other currencies.
* LONG POSITION: The speculative long position in LME aluminium was estimated to have retreated to 21 percent of open interest by Tuesday's close, from 26 percent a day earlier, Alastair Munro at broker Marex Spectron said in a note.
* ALUMINIUM PREMIUM: The U.S aluminium premium on Comex was at 21.4 cents per pound ($472 a tonne), down from a three-year high of 22.1 cents hit on April 11.
* PRICES: LME copper fell 0.6 percent to close at $6,965 a tonne, lead added 1.3 percent to $2,336, nickel rose 0.4 percent to $14,200 and tin was up 0.7 percent at $21,400.
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Additional reporting by Tom Daly in Beijing Editing by Dale Hudson and David Goodman