By Barani Krishnan
NEW YORK (Reuters) - Oil rocketed more than 6 percent higher on Thursday in a snapback from a deep two-month slump as stock market rallies and news of diminished oil supplies drove a short-covering surge by bearish traders.
In a global rush to risk that catapulted oil prices further away from this week's 6-1/2-year lows, world stock markets rose as Chinese shares recovered on hopes that government measures to stimulate the economy would pay off, while the dollar strengthened as risk aversion eased.
The rally was aided by news of a force majeure on Nigerian oil exports declared by Shell and private data indicating more drawdowns in crude this week at Cushing, Oklahoma, traders said. A big upward revision in second quarter U.S. economic growth added to the market's support.
Brent's front month rose $3.05 to $46.19 a barrel by 11:20 a.m. EDT (1520 GMT), staging the biggest percentage gain since early this year and hitting session high at $46.40. On Monday, the contract had struck a March 2009 low of $42.23.
U.S. crude's front-month rose $2.80 to $41.40, after an intraday peak at $41.64. It had hit a February 2009 low of $37.75 on Monday.
Brent, the global benchmark for oil, lost about $5 a barrel, or 14 percent, over the past six sessions on worsening fundamentals from a supply glut as well as weak technicals.
Short sellers had piled into the market, amassing one of the biggest ever positions in U.S. crude, according to regulatory data. But some scrambled to unwind those on Thursday.
"It's the squeeze on short-sellers that we've been anticipating after the oil markets saw panic selling and capitulation trade in the $30 levels," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.
"Couple this with strong continued demand for gasoline and solid GDPs number out of the U.S., and China's actions to reinflate their economy with a very shorted market, the near-term bounce we have been calling for appears to be working out."
(Additional reporting by Lisa Barrington in London, Henning Gloystein in Singapore and Meeyoung Cho in Seoul; Editing by Christopher Johnson, Dale Hudson and W Simon)
