Updated from 9:46 a.m. EDT

May 26 marked the 100th anniversary of the oil discovery in the Middle East. In 1908, a British oil company drilled a well in Persia, now known as Iran, and struck oil. Today, many investors think that the price of oil is near its peak and have started shorting oil stocks, which could create a short-squeeze opportunity.

A short squeeze takes place when a stock's price rises on good news and the stock's short-sellers scramble to cover their bearish positions. This short-covering, in turn, drives the price of the stock even higher.

The ratio for measuring a short-squeeze play is the short ratio, which represents the number of days it would take a stock's short-sellers to cover their positions based on the stock's recent trading volume.

Stockpickr has come up with a list of the

Top Oil and Gas Drilling Short-Squeeze Plays

, a portfolio of heavily shorted stocks in the sector that could rise quickly on any positive catalyst.

One oil driller with a high short ratio is

Parker Drilling

(PKD) - Get Report

. This contract driller, whose short ratio is 8.3, just had its corporate notes ratings increased by Moody's from B2 to B1 due to its solid financial track record. The company also just won a five-year Alaska drilling contract valued at $250 million. The stock has a price-to-earnings ratio (P/E) of 10 and a P/E-to-growth ratio (PEG) of 0.8.

Parker shares are owned by the

ING FMR Diversified Mid Cap Fund

, which is rated five stars by Morningstar and is managed by Thomas Allen. The fund has had a one-year return of 26%. The fund also owns

Juniper Networks

(JNPR) - Get Report

, which has a short ratio of 3.8;

Altera

(ALTR) - Get Report

, with a short ratio of 1.3; and

Thermo Fisher Scientific

(TMO) - Get Report

, with a ratio of 4.2.

Another driller with heavy short interest is

Mariner Energy

( ME), whose short ratio is 6.7. This independent oil and gas explorer and developer just reported its first-quarter earnings, with net income up 89%, earnings per share up 82% and revenue up 49%. The stock has a P/E of 17 and a PEG of 0.57.

Mariner shares are owned by

Amber Capital

, a New York-based hedge fund founded in 2005 that manages over $1.5 billion in assets for over 50 institutional investors. The fund also owns

Pride International

( PDE), with a 2.6 short ratio;

Martin Marietta Materials

(MLM) - Get Report

, with a 13.4 short ratio; and

AK Steel Holding

(AKS) - Get Report

, with a 2.7 short ratio.

Hercules Offshore

(HERO)

is a shallow-water driller with a relatively high short interest; its short ratio is 6.2. UBS initiated coverage on the company with a neutral rating and $35 price target. The stock has a P/E of 24 and a PEG of 2.5.

Hercules shows up in the portfolio of the

DWS Dreman Small Cap Value Institutional Fund

, which was rated five stars by Morningstar and is managed by David Dreman, the noted

Forbes

columnist. The fund has had an average annual return of 19.02% over the last five years. It also owns

RTI International Metals

(RTI)

, with a 6.7 short ratio, and

Anixter International

(AXE) - Get Report

, with a 9.2 short ratio.

For more short-squeeze opportunities in the sector, check out the

Top Oil and Gas Drilling Short-Squeeze Plays

portfolio at Stockpickr.com.

Stockpickr is a wholly owned subsidiary of TheStreet.com.