UPDATE 12-U.S. crude jumps 6 pct in second day of short-covering frenzy
* Refinery outages, Yemen tensions and storm watch fuel gains
* Second-largest 2-day rally in U.S. crude in 25 years
* U.S. crude up 7 pct, extending Monday's 10 pct gain
* Brent up 5 pct, back above $50 a barrel (New throughout, updates prices and market activity to settlement)
By Barani Krishnan
NEW YORK, Aug 28 (Reuters) - U.S. crude rose 6 percent on Friday, notching its first weekly gain in two months, after a rally in gasoline from refinery outages and concerns about strife in Yemen fed a second frenzied day of short-covering in oil.
Market players also kept an eye on a storm that appeared to be approaching the oil-rich U.S. Gulf of Mexico.
U.S. crude gained nearly 17 percent over two sessions, ending eight straight weeks of losses. It was also the second largest two-day rise for the market in 25 years, Reuters data showed.
"A severely oversold and shorted oil market is creating a bid for covering in U.S. crude," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland. Continuación...