At the end of September, the Organization of Petroleum Exporting Countries (OPEC) surprised the markets by agreeing to a production cut. As soon as the 14-nation deal was announced, oil prices jumped more than 5 percent to some of the highest levels since the crash two years ago.

The proposed output cap is historic and represents a shift in the "pump-at-will policy," as Bloomberg called it, "the group adopted in 2014 at the instigation of Saudi Arabia."

Many analysts see that the Saudi gamble, aimed at putting American producers out of business, has failed. While U.S. oil production is down from last year's highs and bankruptcies are up, the industry has become more efficient and the cost of extracting oil from shale is continuing to come down'resulting in the sixth straight week of an increased rig count and the 15th without a decrease. Wall Street Journal (WSJ) reports: "Many oil producers believe drilling in some U.S. regions can be profitable even with oil prices in their current range of $40 to $50 a barrel."

Additionally, U.S. crude stockpiles have fallen for the fifth consecutive week'as have crude imports. American drivers are consuming more gasoline than ever. Exploration budgets, due to the low oil prices, have been slashed with the predicted result of lower production in the next few years. It appears that demand is catching up with production and prices have been creeping up since February's lows. Phil Flynn, senior market analyst with the PRICE Futures Group explains: "While supply is still at a historically high level for this time of year, strong U.S. demand and rising U.S. exports are cutting down the glut."

Meanwhile, the social costs of low-priced oil have been high for OPEC members'hitting Saudi Arabia especially hard. The cartel's biggest producer has lost billions of dollars of revenue, which has resulted in a 20 percent pay cut for its ministers, reductions in financial benefits for government employees, and an increase in fees and fines, and cuts in subsidies, for all in the kingdom. Fear that the loss of the coddled lifestyle could throw the country into chaos, according to industry veteran and consultant Allen Brooks, likely convinced Saudi Arabian officials to moderate their position. The view from Bloomberg concurs: "Saudi Arabia's willingness to do a deal, in particular, demonstrates the economic pain lower oil prices has caused producers."

Iran, OPECs other majordomo, has, due to sanctions, gotten used to austerity and is now seeing its economic pressures easing and its oil exports increasing. It, therefore, heading into the OPEC meeting, appeared to be rejecting the Saudi output offer and dashed hopes of a compromise to cut crude production. The Financial Times quotes one Gulf OPEC delegate as saying: "All producers are hurting."

The surprise came on Wednesday, September 28, when, after two years of failed attempts at an agreement and months of dialogue leading up to the meeting, "Saudi Arabia agreed to take on the bulk of OPEC's proposed cuts," wrote the WSJ. The headline from the New York Times read: "OPEC agrees to cut production, sending oil prices soaring."

The proposed cuts are moderate in reality, only 1-2 percent of the 14-nation cartel's 33.2 million barrels a day of production and they represent less than 1 percent of total global production. Yet, the announcement buoyed markets and added power to the previously mentioned price momentum. According to CNN Money, the agreement offers "powerful symbolism."

While the price of oil received a bounce from the news that has given the industry cautious optimism, it is not expected to have a big impact on the price of gasoline. Oil prices are now expected to stay near $50 a barrel through the end of the year and below $60 a barrel through 2017'which will likely mean an increase of a few cents a gallon at the pump. Julian Jessop, an oil analyst at Capital Economic, in CNN Money, called the situation "a period of G