Earlier yesterday, the Organization of Petroleum Exporting Countries rejected a Bush administration plea and decided to cut crude oil production by 1 million barrels per day in April, a move that will tighten global supplies even more and pressure prices.

"We're willing to look at some short-term things," McSlarrow told reporters after addressing a meeting of the National Energy Marketers Association. He refused to elaborate.

"Obviously, the president is concerned about the impact of gasoline prices on consumers," he said.

McSlarrow noted that retail gasoline prices have soared to a record $1.76 per gallon, in part because of the large number of specialized gasoline blends required to meet various air pollution rules in U.S. cities.

"There's no question in mind that that's a huge part of the problem," he said.

Both Bush and Democratic presidential hopeful John Kerry have called for reducing the dozens of motor fuels that must be manufactured to meet state and local pollution requirements, so that supplies can be more interchangeable throughout the nation.

When adjusted for inflation in 2004 dollars, the highest retail gasoline price was $2.99 per gallon in March 1981, according to the U.S. Energy Information Administration. When Bush was sworn into office in January 2001, the weekly retail gasoline price stood at $1.47 per gallon.

"We're going to take a look at whether or not there are any short-term things that can be done. But I think the fundamental fact remains ... that we need an energy bill out of Congress," McSlarrow said, referring to legislation that has been stalled in the Senate.

The administration will "stay on course" with its plan to keep filling the nation's crude oil stockpile, the Strategic Petroleum Reserve, because it is important to national security, McSlarrow said.

The effect of filling the emergency stockpile adds "at most" 1 cent per gallon to the price of gasoline, according to McSlarrow.

Gary Ross of leading U.S. energy consultancy PIRA Energy said: "We estimate speculative funds have already invested $15 billion in oil futures contracts in New York and London. This decision is only going to encourage the speculators to stay long on oil markets." Saudi Arabia's regional Gulf allies Kuwait and the United Arab Emirates had recommended OPEC consider delaying tighter output restrictions to allow oil prices to cool.

The unusual division among OPEC's core Gulf members raised speculation that the United States is now targeting Kuwait and the UAE, instead of Saudi, for diplomatic efforts aimed at getting lower prices.

Despite a ritual call from ministers for full adherence to quotas, the behind-the-scenes sop to Kuwait and the UAE appears to be a less than rigorous requirement to immediately meet new limits.

Delegates said that to cater to Kuwaiti and UAE concerns it was privately acknowledged by Saudi that actual supplies would not be cut much more in April, unless oil prices fall.

Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah admitted that it would be May before cartel compliance improved.

"This idea of a compromise to get the Kuwaitis on board, meaning not much of a cut will get implemented, is going to cap prices," said Nauman Barakat of brokers Refco in New York.

Saudi and a few other OPEC countries have already ordered slightly lower April volumes, moving down toward the new combined limit of 23.5 million barrels daily.

But Reuters estimates from a survey of OPEC customers are that actual supplies are likely to drop by only about a third of the planned million barrel a day cut.