NEW YORK Far from the armies of the Persian Gulf, an oil war israging on the eighth floor of the World Trade Center.
In skirmishes lasting 5 1/2 hours at a time, brokers at the NewYork Mercantile Exchange are setting oil prices for the world bytrading contracts for future deliveries.
When oil supplies were threatened by Iraq's invasion of Kuwaitlast week, contracts for September delivery of crude oil jumped 31percent to $28.32 from $21.54, before retreating to $26.23 a barrelby Friday's close.
"It's basically news- and rumor-driven at this point," saidbroker Albert H. Helmig Jr.
And physical. Visitors hustled on and off the floor forfive-minute glimpses of the front lines are bounced around likepinballs by traders and clerks charging down the narrow walkways. Acloser look at the crude oil pit? Forget it. Brokers ring the pitfive or six deep, jostling for position.
They strike deals with trading partners yards away through arefined series of hand signals. Palms out, you're selling. Palmsin, you're buying. Once the deal is struck, the seller flips a cardrecording the transaction into a net at the center of the pit. Thecard is time-stamped and submitted for audit purposes.
"It's a definite physical advantage to be 6 feet tall, to beloud. Body language counts," said Helmig, a tall, medium-built man.
Profits, the spoils of this war, are won with intuition thatdetects a market swing before the opposition.
Mistakes can be costly.
"If you miss something, it could be a dollar against you an hourlater," Helmig said. "On a hundred lots, that's $100,000."
Lots, or contracts, cover 1,000 barrels. It's not uncommon totrade hundreds of lots in a single transaction, but in a market asvolatile as this one the contracts get smaller.
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