Investing.com-- Oil prices jumped Tuesday, underpinned by a dip in the dollar on weaker U.S. economic data and the prospect of tighter global supply amid bets on of broader sanctions against Iran's oil exports.
At 14:30 ET (18:30 GMT), Brent oil futures rose 1.7% to $88.48 a barrel, while West Texas Intermediate crude futures rose $1.46% to settle at $83.36 a barrel, after trading as low as $80.88 intraday.
Oil prices ride dollar dip higher
The dollar fell 0.4%, pressured a fall in Treasury yields after data showed that manufacturing and services activity unexpected fell in April, boosting rate cut hopes.
Traders now see a 41% change of a rate cut in July compared with about 35% a year earlier.
As oil is priced in dollars, a lower greenback boosts demand from foreign, non-dollar buyers.
Tighter sanctions on Iran?
Bets on tighter supplies were furthered by the U.S. preparing tighter oil export restrictions on Iran, even if it remained unclear just how strict the U.S. would be, given that high gasoline prices in the U.S. have become a contentious topic for the Biden administration.
The U.S. Senate will shortly begin considering a foreign aid package that includes sanctions on Iran's oil exports that target ships, ports, and refineries that process Iranian oil.
Additionally, EU foreign ministers agreed in principle on Monday to expand sanctions on Iran following Tehran's missile and drone attack on Israel this month.
Fresh domestic crude supply data eyed
Following last week's much bigger than expected build in crude inventories, the latest update on U.S. weekly crude supplies is likely to garner close attention amid expectations that supplies will be curbed by rising demand.
The American Petroleum Institute is expected to report later Tuesday that weekly crude inventories rose 1.8M barrels for the week ended Apr. 19.
( Peter Nurse, Ambar Warrick contributed to this article.)