Oil prices rallied today after being oversold for nine straight days, as chatter on protecting depositors calmed market fears modestly ahead of tomorrow's Fed meeting. Crude prices were further boosted by Russia saying it will extend its 500,000-barrel-a-day crude output cut through June.

The Fed’s interest rate decision on Wednesday and its expected effect on the economic environment is likely to move crude prices further, said Vikas Dwivedi, global oil and gas strategist at Macquarie Group Ltd.

“If these big macro factors start to really turn the corner, oil will rally,” Dwivedi said.

API

API reported a surprise crude inventory build of 3.26mm barrels (after 3 relatively quiet weeks).

Source: Bloomberg

WTI was trading just above $69.50 ahead of the API print (at the upper end of the recent trend channel)...

And leaked a little lower on the surprise crude build...

"Oil prices have become particularly caught up in the downward pull amid the current market turmoil," said Barbara Lambrecht, commodity analyst at Commerzbank, in a note, adding that,

"We regard the price slump to be excessive and speculatively driven for the most part."

We also note that crude is now trading at a level that could prompt the U.S. government to consider refilling the Strategic Petroleum Reserve, which sits at a 40-year low