As the Gulf gets back to business after Hurricane Gustav, energy traders will be closely watching the latest oil inventories released Thursday. Of course the question on everyone’s minds is the same, “Is $100 oil, next?”

(The data is coming out one day later than usual because of the Monday holiday.)

A Reuters poll forecasts stockpiles of crude to rise by 100,000 barrels, gasoline supplies to draw down by 1.3 million-barrels and a distillates to build by about 500,000 barrels. However, it’s important to note disruptions caused by Gustav will not be fully reflected in U.S. inventory data until next week.

”The important data to trade is whether you continue to see declines in reformulated gasoline,” says Joe Terranova on Fast Money. “Refiners are currently trading higher because supplies of inventory are being worked lower.”

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Ahead of the data oil

US%40CL.1 loading...

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[US@CL.1  Loading...      ()   ] was trading down, touching its lowest level in 5 months.

"It's the economy, economy, economy. Everyone's worried about demand destruction," said Robert Nunan, a risk management executive at Tokyo-based Mitsubishi Corp.

Signs of slowing oil consumption in major developed economies have undermined the fundamental argument that booming Asian giants such as China and India are straining oil supplies, while a rebound in the dollar over recent months has prompted many funds to unwind their short-dollar/long-commodities trades.

Technical traders say the break of a key support level could contribute to a deeper decline, extending oil's nearly $40 a barrel slump since its July 11 record high.

Terranova sees it differently. “I think the best trade is to remain on the sidelines. I would not play oil from the short side, he counsels.

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Trader disclosure: On Sept 3, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MSFT), (WMT), (UUP), (DIS); Macke Is Short (TM); Adami Owns (BTU), (C), (AGU), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (NOK), (SUN), (TSO), (VLO), (JCP); Finerman's Firm Owns (AAPL) Calls, (JCG) Calls, (HUN) Calls; Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Is Short (XLF), (IYR), (IJR), (MDY), (IWM), (SPY), (COF), (BBT), (BAC); Pete Najarian Owns (AAPL) And (AAPL) Collar, Pete Najarian Owns (EP) Call Spread, Pete Najarian Owns (ETFC), Pete Najarian Owns (FTO) Call Spread, Pete Najarian Owns (LEH) Put Spread And (LEH) Call Spread, Pete Najarian Owns (NOK), Pete Najarian Owns (SCHW) Calls, Pete Najarian Owns (WFMI) Put Spread, Pete Najarian Owns (XLF) And (XLF) Collar

Terranova Owns (EOG), (NOV), (VLO); Terranova Is Long december 2008 Reformulated Gasoline 'Cracks'

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (BRE), (CNTY), (CNW), (CLB), (OFC), (DLM), (DRH), (DLR), (EPR), (ESS), (EXR), (AGM), (FL), (GBL), (GNET), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (GWX), (SSYS), (SKT), (UA), (BIV), (VV), (BLV), Goldman Sachs Financial Square Fund - Money Market Fund, Seagate Technology Tax Refund Rights

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

Charles Schwab Is A Sponsor Of "Fast Money"

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