Summary
- Prices down after jumping $1 on strong euro zone PMI data
- U.S. Senate to take up aid package with Iran oil sanctions
- Political backdrop fraught with many risks: ANZ
April 23 (Reuters) â Oil prices slipped on Tuesday after a short-lived boost from stronger economic data out of Europe as the market weighed the potential fallout from any fresh U.S. sanctions on Iranâs oil exports.
Global benchmark Brent crude oil futures were down 51 cents or 0.6% at $86.49 a barrel by 1141 GMT, while U.S. West Texas Intermediate crude futures fell 56 cents or 0.7% to $81.34.
Both benchmarks had jumped $1 earlier after data showed that overall business activity in the eurozone expanded at its fastest pace in nearly a year this month, led by a buoyant recovery in the blocâs dominant service industry.
Meanwhile, EU foreign ministers agreed in principle on Monday to expand sanctions on Iran following Tehranâs missile and drone attack on Israel this month.
The U.S. Senate will begin considering a foreign aid package that includes sanctions on Iranâs oil exports that target ships, ports, and refineries that process Iranian oil.
âIn a sober market, not drunk on the âwhat ifsâ of a direct war between Israel and Iran, sanctions would almost be tolerable,â said John Evans at oil broker PVM, citing OPEC+ spare capacity and the fact that China imports nearly all of Iranâs crude.
Moreover, Iran and Israel going beyond symbolic attacks ârisks the ire of a U.S. that right now has its own political reasons for letting Iranian oil get to water,â Evans added.
Investors this week are waiting for the release of U.S. gross domestic product figures and March personal consumption expenditure data â the Fedâs preferred inflation gauge â to assess the trajectory of monetary policy.
U.S. crude oil inventories are expected to have increased last week while refined product stockpiles likely fell, a preliminary Reuters poll of analysts showed.
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