Despite the pressure to ramp up output, OPEC+ was concerned that a fourth global wave of COVID-19 infections could hit the demand recovery, a source told Reuters a little before the vote.
"The (price) move looks a bit outsized given the ministers just reaffirmed the decision announced in July, but it shows how tight the market is, reinforcing our view of asymmetric price action with risks skewed to the upside at these inventory levels," Barclays said in a note.
Investors will closely watch Wednesday's crude inventory data from the U.S. Energy Information Administration for further direction.
OPEC has a clear interest in sustaining reasonably high prices but not so high that significant additional supply is encouraged back into the market. At prices above $80, a lot of marginal supply becomes economic and it takes about 6 months to bring significant volumes online.
That’s a pattern that has played out in other markets this year too. New supply always seems to be about six months away. As long as the break above $80 holds we can continue to give the benefit of the doubt to the upside.
Meanwhile the oil sector is rebounding. The oil services sector has been eviscerated by the decline in spending on exploration and development. As companies begin to respond to higher prices there is potential for at least a partial revival.
The same argument can be used with the fertiliser sector. Higher commodity prices will encourage additional planting. Mosaic hit a new recovery high today and Nutrien continues to trend higher.
The continued uptrend in oil is also a support for the battery metals sector. Albemarle is firming from the lower side of a two-month range.