Bloomberg – Oil rallied in its biggest two-day advance since August after a slump to a 12-year low prompted some investors to buy back record bearish bets. Front-month futures have jumped more than 16 percent after sliding to the lowest since 2003 on Wednesday. Earlier this month speculators’ amassed the biggest ever short position in U.S. crude amid concern that turmoil in China’s markets will curb fuel demand while an increase in exports from Iran will exacerbate a global glut. Oil may be the “trade of the year,” if it can weather the surge in the Middle East producer’s shipments, according to Citigroup Inc. “There will be some short-covering taking place in oil,” said Richard Mallinson, an analyst at consultants Energy Aspects Ltd. in London. “We’re seeing volatility across all markets, not just energy.” Oil is still down about 17 percent this year as turbulence in global markets adds to concern over brimming U.S. stockpiles and the prospect of additional Iranian barrels. Markets could “drown in oversupply,” sending prices even lower, according to the International Energy Agency. The energy industry is facing “very sharp shocks” as it struggles to deal with a “flood of oil,” BP Plc Chief Executive Officer
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