Sam Fletcher
Senior Writer

Diplomatic and government policy responses appear to be coming to a head in a climate of accusations over high energy prices, said industry analysts.

"Some diplomatic, regulatory, or policy watershed is drawing near, or at least some venting of pent-up pressures is likely to manifest itself," said Paul Horsnell at Barclays Capital Inc., London. "At this moment, what is happening in Washington and elsewhere in terms of policy debates is as much a part of what [energy] traders need to be aware of as is supply and demand."

Horsnell noted "the provocative rhetoric" as UK Prime Minister Gordon Brown recently described the Organization of Petroleum Exporting Countries as a "scandal," while Australian Prime Minister Kevin Rudd spoke of applying "the blowtorch to the OPEC organization." Horsnell said, "It is fair to assume that so overt a stance does not facilitate constructive dialogue." Oil and gas producers have been "more discrete" in their language, but "it seems clear that they are beginning to lose some patience with the spread in the climate of rolling accusations," he said.