(Bloomberg) -- Energy stocks are experiencing a massive rally, driven by the weekend drone strike on a Saudi Arabian oil facility removed about 5% of global supplies and raised the specter of more destabilization in the region. Crude futures in New York jumped 10%.

Oil servicers and exploration & production stocks with high short interest, including Whiting Petroleum Corp., are leading the way early Monday, with Whiting soaring as much as 35%, the most ever. Refiners such as PBF Energy Inc. are underperforming given the harmful potential impact to margins.

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Here’s which stocks analysts expect to rally:

Oilfield Services

“High uncertainty will naturally fuel short covering,” Raymond James said in a note. The bank wouldn’t be surprised to see a rally in HLX, RES, and NOV given oil leverage and short interest.

Offshore drillers including RIG, VAL, DO, and NE are also to likely see a “large short cover bounce,” Citi said.

Refiners

Saudi event is a “clear negative” for U.S. refiners, RBC said in a note. “The medium and heavy grades that Saudi produces are already in short supply, and a likely increase in oil prices could have a negative impact on demand given an already tenuous economic backdrop,” analyst Brad Heffern wrote. Retail margins for DK, MPC, PARR, and PSX could be hurt.

Coastal refiners could see near-term headwinds, while diversified firms may be less hurt, Cowen said in a note. Integrateds such as XOM could also see some equity price appreciation. There’s “limited direct upstream exposure to Saudi Arabia within the peer group, though TOT, BP, and XOM all derive ~10% production from the Middle East,” analyst Jason Gabelman said.

E&P

Shares most likely to gain include XOG, WLL, CPE/CRZO, according to Citi. Natural gas-focused stocks, including RRC and SWN, may also benefit from short-covering, the bank added.

DNR, NOG, JAG are among E&Ps who lead Seaport Global’s E&P recommendations as companies with higher oil production as a percent of 2020 total production estimates. Additionally, KeyBanc elected to upgrade JAG, CDEV, SM, and WLL on Monday, citing a “likely high beta response” to crude’s rally.

In Canada, Eight Capital listed stocks with high short interest, including VET CN, BNE CN, KEL CN, and ATH CN. “Expect Canadian oil stocks to rally significantly,” Haywood said in a note. Haywood recommended exposure to Canadian E&Ps including PXT CN, TOG CN, WCP CN, CPG CN, VLE CN, CVE CN.

To contact the reporter on this story: Michael Bellusci in Toronto at mbellusci2@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Scott Schnipper

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