Oil!

Crude oil is ripping higher again.

After rising more than 10% on Thursday, the price of West Texas Intermediate crude oil is up nearly another 7% on Friday to well above $45 and was creeping back to nearly where it started the month.

Earlier this week, the price of WTI was lower by more than $7 a barrel, falling below $38 for the first time since the demand shock of the financial crisis.

In an email on Friday morning, Dave Lutz at JonesTrading said the rip in crude over the past two days had to do with one thing: People in the market had become massively short oil, and those shorts are getting called.

Here's Lutz: "Since mid-June, hedge funds have accumulated one of the biggest short positions in US crude on record, equivalent to almost 160 million barrels of oil, up from less than 60 million, according to data from the US Commodity Futures Trading Commission."

Here's the chart.

fut_chart (36)

(FinViz)

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