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Blackout Makes for Turmoil in Oil Futures Pits

Worry about refineries triggers spike in prices. Executives fill in for clerks stranded at home.

August 16, 2003|Thomas S. Mulligan and Walter Hamilton | Times Staff Writers

NEW YORK — Wall Street's blackout-induced worker shortage forced some marketplaces to get creative Friday -- nowhere more so than at the New York Mercantile Exchange, whose president was briefly pressed into duty as a data-entry clerk.

Nymex is where futures traders, working in noisy auction pits, set prices for oil, natural gas, electricity and other commodities, including precious metals.

In contrast to slow trading on the stock and bond markets, Nymex was extremely busy during an abbreviated session Friday as traders frantically swapped crude-oil and heating-oil contracts.

Concern that the massive power outage could keep refineries closed for a lengthy period drove frantic morning trading, said Brendan Touhey, an independent trader, or "a local," in Nymex parlance.

Touhey and other weary traders and exchange employees were interviewed after the close of trading as they relaxed on a bench outside Nymex's spectacular waterfront headquarters on the southern end of Manhattan.

The style on the Nymex floor is hands-on and face-to-face, as market players scream out their deals, write the particulars on cardboard chits and fling them into a pit where a "clocker" punches them with a time stamp.

Then a "runner" gathers the chits and drops them into a chute to a downstairs room where data-entry clerks feed the information into computers by hand.

Dean Mavronicolas, a clerk and sometime electricity trader, said the lack of train and subway service kept so many people from getting to work that many Nymex officials, including exchange President J. Robert Collins, stepped into unaccustomed roles to keep the business flowing.

For Collins, data entry wasn't such a stretch, since he had begun his long Nymex career as a clerk, Nymex spokeswoman Nachamah Jacobovits said Friday.

Nymex also made accommodations for people who couldn't get home Thursday night, setting up cots in various places at the headquarters, Jacobovits said.

Touhey, the trader, said he was deeply worried in the morning because he earlier had placed trades betting that energy prices would fall.

But the blackout caused the prices of some energy futures contracts to rise early on Friday, temporarily strapping traders such as Touhey with losses.

However, prices moderated later in the day as word spread that electricity was returning to many areas.

Crude oil futures finished slightly lower for the day.

Heating oil also was little changed by day's end.

"It was pretty crazy," Touhey said. "I feel like I'm on my third cup of coffee -- and I haven't had any."

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