"Countries like Saudi Arabia and Russia — which are heavily dependent on energy sales to fund national budgets and government services — are trying to manage the markets by promising to reduce production. The move on Monday pushed oil prices up by nearly 3.8 percent, to almost $50 a barrel, the highest level in about three weeks.
The strength in oil prices sent American stocks to new highs. With energy shares surging, the Standard & Poor’s 500 index surpassed its record, closing just above 2,400 points.
The latest swings are proving problematic for global producers. For years, Saudi Arabia and other nations in the Organization of the Petroleum Exporting Countries were often able to easily prop up prices. But their clout has ebbed as new players like American shale producers came into the market and the growth in demand for oil slowed.
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Amid weak prices late last year, OPEC countries, along with Russia, agreed to cut around 1.7 million barrels from their collective output. It worked for a while as markets recovered. But the higher prices also drew in OPEC’s rivals, including shale oil producers in the United States.
That is forcing Saudi Arabia and Russia to step in again. The two countries agreed on Monday to lower their production levels for nine months longer than originally agreed, through next March. OPEC, of which the Saudis are the de facto leaders, is likely to follow suit when its 13 members meet in Vienna on May 25"
https://www.nytimes.com/2017/05/15/business/energy-environment/saudi-arabia-russia-opec-oil.html
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