Gaming Oil Amid Rapidly Changing Developments

As if trading oil isn't hard enough, how on earth should you game the space now considering all the rapid developments related to the spill.

And developments are rapid. Check out the following:

- The House Natural Resources Committee opens hearings on Wednesday and they promise to be as explosive as July 4^th fireworks as lawmakers hurl blame at the various companies involved in the gulf oil spill.

- On Tuesday the Obama administration slammed Transocean for its attempt to limit its liability in the gulf crisis to under $27 million – calling it a similar tactic used by the owners of the Titanic.

- The New York Times reports, Congress would be on solid constitutional ground if it wanted to raise the liability caps retroactively on BP for economic damages.

And those are only the developments influencing the markets today. There's sure to be more - much more - tomorrow not to mention the days and weeks ahead.

Considering how rapidly circumstances are changing, how should you trade the space?

Instant Insights with the Fast Money traders

BP has lost something 55 billion in market cap, says Guy Adami. I can’t help but wonder how much is too much. It’s starting to feel like Toyota.

As far as I’m hearing, the government doesn’t have the technology to stop the spill. I think BP will continue to suffer, counters Tim Seymour. I wouldn't touch it.

I like oil as something to own long term, adds Joe Terranova. I certainly wouldn’t go short.

I'm bullish crude, says Steve Cortes of Veracruz. But my play is purely based on technicals. Typically crude and the China ETF are positively correlated and the FXI is trending higher.

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Trader disclosure: On May 25, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (FTO), (IPSU), (RSX), (PFE), (STLD), (TER), (YHOO), (AXP), (BMO), (BBY), (DIS), (XCO), (BTU), (SWN), (GLD); TERRANOVA OWNS GOLD; Cortes Owns Gold; Cortes Owns (FCX), (FXI), (GS); Scott Nations Is Long (SPY); Edwards Owns (VXX); Tomasulo owns VIX calls; Tomasulo owns (VXX); Tomasulo owns (PCLN) calls; Tomasulo owns (V) calls; Tomasulo owns Gold spot futures; Tomasulo owns Euros

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