By Dan Molinski
-- U.S. oil prices fell from a three-week high Tuesday despite a strong session on Wall Street, as energy investors exercised caution ahead of weekly data on domestic oil inventories that have risen sharply recently.
-- West Texas Intermediate futures, the U.S. oil benchmark, ended 0.2% lower at $62.99 a barrel on the New York Mercantile Exchange. The decline came after prices rose Monday to $63.10 a barrel, the highest close since May 1.
-- Brent crude, the global oil benchmark, closed 0.3% higher at $72.18 a barrel on London's Intercontinental Exchange.
U.S. Stock Market:
The Dow Jones Industrial Average was nearly 200 points higher Tuesday after the U.S. Commerce Department said it would grant 90-day licenses for some companies to continue exporting to blacklisted Huawei and its associates, providing some relief after the crackdown on the Chinese company prompted a retreat from U.S. technology stocks.
But oil markets, which sometimes move in lockstep with stock markets, held back Tuesday. Peter Cardillo, chief market economist at Spartan Capital, said WTI prices hit a "technical roadblock" Tuesday after Monday's three-week high, suggesting traders were waiting to make any large bets until after weekly inventory data Wednesday from the Energy Information Administration.
"Today's decline, I think, was just anxiety over the upcoming inventory reports. The market is resting," Mr. Cardillo said. "But if the data tomorrow shows a substantial decline in inventories I think you could see prices moving back up."
A survey of 12 analysts by The Wall Street Journal shows an average forecast for a 1.4-million-barrel decline in U.S. crude inventories for the week ended May 17. Last week's EIA report showed domestic commercial inventories rose to a 20-month high of 472 million barrels.
The American Petroleum Institute, an industry group, said late Tuesday that its own data for the week showed a 2.4 million-barrel increase in crude supplies, a 350,000-barrel rise in gasoline stocks and a 237,000-barrel decrease in distillate inventories, according to a market participant.
OPEC: Some price support was coming from the Organization of the Petroleum Exporting Countries, which held a precursor meeting over the weekend to prepare for the June summit in Vienna, where the group and other top producers including Russia will decide whether to continue a 1.2-million-barrel-a-day production-cut deal aimed at limiting supplies.
"A bullish skew has developed this week as OPEC+ appears to be leaning in the direction of an extended phase of production curtailment through the second half of this year," said Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates.
Mr. Cardillo at Spartan Capital agreed, saying: "OPEC is clearly not in any rush to ramp up production."
Oil Hedging: Oil companies are hedging more and at lower prices, a trend that analysts at Goldman Sachs link to a broad push for more capital discipline. Average hedged prices could be $57.01 a barrel this year compared with $57.69 last year, Goldman said in a research note. "In the face of sustained higher oil prices, producers have reiterated their commitment to maintaining 2019 capital budgets set broadly on the basis of $50-$55-a-barrel WTI," it said. "We believe current 2019-20 hedging strategies that have resulted in lower-than-average hedging levels are likely partly driven by this producer commitment to discipline in the face of a volatile oil market."
-- The Energy Information Administration releases weekly data on U.S. oil inventories on Wednesday at 10:30 a.m. ET.
Write to Dan Molinski at Dan.Molinski@wsj.com