Members of the Organization of Petroleum Exporting Countries (OPEC), pushed by Saudi Arabia, agreed to cut production back by one million barrels a day-- about four percent -- starting Thursday, Reuters reported.
American consumers have already seen a recent rapid rise in price of gasoline, which is now hovering at record levels around $1.80 per gallon on average.
The rise in gasoline prices has also emerged as a campaign issue as both President Bush and his Democratic challenger Sen. John Kerry of Massachusetts have outlined ways to defray rising fuel costs while trading barbs over gasoline taxes and energy policy.
"We need a new direction on energy policy," Kerry said during a campaign appearance in California Tuesday. "For three years, George Bush and Dick Cheney have bent over backwards to help their big contributors in the oil industry. I'm going to stand up for students and middle class families and all those who need relief at the pump."
Kerry said he would use diplomatic pressure to convince OPEC to produce more and would stop "diverting" oil into the nation's Strategic Oil Reserve as long as prices remain high. Kerry also said he would invest in new types of fuel and more fuel-efficient cars, pledging to make the United States oil-independent in 10 years.
For its part, the Bush campaign has accused Kerry of "wacky" ideas on energy policy. A new Bush campaign ad says Kerry once advocated a 50 cent per gallon gas tax and voted 11 times to raise taxes on gasoline.
"That's John Kerry," the ad says. "If Kerry's tax increase were law, the average family would pay $657 more a year."
On Tuesday the president's spokesman said the administration's energy plan, which did not pass in Congress, would have kept gasoline prices in check.
"We wouldn't be in this situation right now if Congress had acted on what the President proposed some three years ago to pass a comprehensive energy policy ... It's important that Congress move forward as quickly as possible to pass a comprehensive energy strategy. And we will continue to work to make sure they do that," White House Press Secretary Scott McClellan said.
As a candidate in 2000 then Gov. George W. Bush said the American president should use his influence to "jawbone" OPEC into meeting the country's energy needs by "opening the spigots."
When asked if the president would contact OPEC leaders and urge them to produce more oil, McClellan said "we continue to engage in ongoing discussions with major producers around the world about the importance of letting the market determine the prices."