Crude oil is ripping higher again.

After rising more than 10% on Thursday, the price of West Texas Intermediate crude oil is up another 3% on Friday, popping above $US44 a barrel.

Earlier this week, the price of WTI was more than $US6 a barrel cheaper, falling below $US38 for the first time since the financial crisis demand shock.

In an email on Friday morning, Dave Lutz at JonesTrading said that the rip in crude over the last 2 days has 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 U.S. crude on record, equivalent to almost 160 million barrels of oil, up from less than 60 million, according to data from the U.S. Commodity Futures Trading Commission.”

Here’s the chart.

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