West Midland companies could soon start to buckle under the pressure of relentlessly rising oil prices, it was claimed yesterday.
The warning from Birmingham Chamber of Commerce and Industry came as the price of crude set a new record.
The cost of oil has spiralled to $122 a barrel. A month ago companies were cautious about the future as the global economy began to take a downturn.
At the same time, however, there was some optimism that raw material prices had peaked.
But the continuing increase in oil prices coupled with predictions that crude could ultimately reach $200 a barrel, has sowed doubt in the region's boardrooms.
"The words 'straw' and 'camel's back' come to mind," Ms Teasdale said.
"Instead of the region's businesses, especially the manufacturers, being able to plan for the future or even stand still in the hope that there will be an upturn in global forecasts, they are facing even harsher challenges.
"Analysts are predicting that rising oil prices will kill off any recovery in the UK economy as well as around the world, and if they stay at today's high, or rise even further as is expected, there will be serious consequences for West Midlands business. "The Government should announce now that it has no intention of implementing the delayed increase in fuel duty by 2p when it becomes due in October."
Yesterday's new record was the latest spurt in an advance that has seen oil prices more than double from below $50 a barrel at the start of 2007.
Supply disruptions in Nigeria, where a strike and attacks by militants has hit production, helped boost a market nervous about any threats to supply.
Tensions over Iran also grew when the world's fourth-biggest producer refused to accept intrusive inspections of its nuclear programme the West fears could be linked to weapons.
US light crude for June delivery was up $1.79 at $121.76 a barrel after earlier touching $122. London Brent crude was up $2.29 at $120.28 a barrel, after an earlier record of $120.35.
Gold was also strong, as oil's advance helped spur a rebound from a four-month low last week. But gold is still some way below a record of $1,030.80 an ounce reached on March 17.
Goldman Sachs predicted oil could soar towards $150-$200 a barrel because of a lack of adequate supply growth.
"The possibility of $150-$200 per barrel seems increasingly likely over the next six to 24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty," the bank said.
The Wall Street house had predicted back in 2005 that oil was entering a "super-spike" period.
"The downward move in oil last week now seems like only a correction," said Christopher Bellew, senior vice president at Bache Commodities.
"The effect of the credit crisis in the United States is reducing people's disposable incomes and you'd expect this to have an impact on the oil price, but it's not having any impact."
Demand from emerging markets such as India and China is more than compensating for the US downturn, he said.
Oil prices further into the future have also risen sharply, with prices out to 2016 above $110 a barrel.
The rise of a quarter since the start of this year is partly due to the problems in Nigeria, plus the weak dollar, which has inflated the price of commodities denominated in the US currency.
Last week, oil retreated almost $10 a barrel, partly due to a reduction in speculative positions and as strikes in Nigeria and at the Grangemouth refinery in Scotland ended.
Exxon Mobil said yesterday it had returned oil output in Nigeria to normal levels after an eight-day strike, but Shell said its production there was still down by about 164,000 barrels a day due to recent militant attacks.
"A lot of this is supply-driven, with the market very vulnerable to any disruption in supplies," said Mark Pervan, a senior commodities analyst at the Australian & New Zealand Bank.
President George W Bush is expected to talk to officials from Saudi Arabia about the effects of high fuel prices on the US economy on his trip to the world's top exporter later this month. He has called on Opec, the petroleum exporters' cartel, to raise output to help bring down prices.
