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Supply Concerns Spark Fresh Bull Run

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Omicron demand fears are taking a back seat despite new Covid-19 travel restrictions and staff shortages triggering mass flight cancellations and hitting jet fuel demand this year. Instead, it was supply concerns that propelled international benchmark Brent toward $85 per barrel this week. Market bulls see oil demand recovering further from Covid-19 this year, with supply falling short due to a lack of upstream investment through the pandemic. An acute lack of Opec-plus spare capacity has prompted many analysts to predict a new supercycle in oil. Brent gained $2.48/bbl this week to close at $84.47/bbl Thursday while US price-pin West Texas Intermediate rose $2.66/bbl to finish at $82.12/bbl.

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