It's tempting to see the recent announcement that OPEC will cut production as having a positive impact on the price of oil. Taken out of the context of reality, OPEC's historical influence is huge - just the mere announcement of a production cut would send prices up.
But the reality is that OPEC has lost its war against shale producers, and is trying one last time to exert control over the market. Yes, we will see a (very) short term upward tick in the price per barrel, but any price move will not be sustainable. American oil giants are flush with cash, and eager to jump back into the game at the right price. Let's further assume that all of the OPEC member states adhere to the production cuts, except of course those that have already negotiated exemption clauses (Iran, Libya, Nigeria). Let's further assume that Russia agrees to halt production increases. As the price moves up towards $55-$60, U.S. shale producers will be incentivized to restart production. All of those capped wells will come online, in less time than it takes to sign another deal. Any price gains from the production cuts overseas will be swallowed up by the increased supply from domestic shale production. OPEC is facing a losing battle, and their only way out is to invest in more production capacity.