When most people think of financial markets, they think of screaming traders on the floor of the iconic New York Stock Exchange.

But since Hurricane Katrina slammed the Gulf, and in fact for months before that, the more important screaming has been taking place across Lower Manhattan in a nondescript office building on the banks of the Hudson River. The building is home to the New York Mercantile Exchange, the world's largest physical commodities exchange and principal trading site for futures contracts on crude oil, gasoline, natural gas and other energy products, as well as gold and other precious metals.

Increasingly, the stock and bond markets take their cues from oil prices set at the Nymex. When oil drops these days, stocks tend to rise. Nymex prices also strongly influence what consumers pay for gasoline, home heating oil and other energy products.

But with a vast influx of money from mutual funds that invest in commodities, hedge funds and quick-trading individual investors, some industry analysts question how much Nymex prices reflect the reality of supply and demand and how much they reflect speculative "hot money" chasing big returns in a generally low-return investment environment.

"The flow of money into commodities is comparable with the flow of money into mutual funds in the 1980s and 1990s," said Tom Kloza, chief analyst at the Oil Price Information Service. "It's like steroids, pumping up prices and leading people to talk about super-spikes to $100 a barrel or more."

Ten years ago, an average of 94,456 futures contracts for light, sweet crude oil (the most popular kind) traded hands each day at the Nymex. So far this year, the daily average is more than twice that, at 238,000. Daily volume in crude oil futures hit a record of 406,314 contracts on Aug. 30, in the wake of Katrina.

In 2002, the Nymex, along with the Chicago Mercantile Exchange, introduced e-miNY, a half-size version of Nymex's standard 1,000-barrel oil futures contract that allows investors to get into the market at a lower cost. Targeted at speculative individual investors, e-miNY's popularity soared. Daily trading volume rose from an average of 1,110 contracts in 2003 to 12,695 so far this year. An increasing number of mutual funds follows benchmarks such as the Goldman Sachs Commodity Index.

Nymex members are feeling flush. A seat on the exchange, which confers trading rights, sold for a record $2.75 million on Aug. 17, more than triple the amount from the same time in 2000. The privately held Nymex has flirted with the idea of an initial public offering and entertained multiple joint-venture offers from high-profile private equity firms.

Traders who spend their days in the Nymex trading pits say they see a torrent of cash flooding in from speculative investors looking to capitalize on energy price momentum. But they also say the fact that oil-producing nations are pumping close to full tilt, while global energy demand continues to rise, is the key driver of high oil prices.

"Of course you see speculative spikes, but we could never get to these levels without real factors in the marketplace," said Raymond Carbone, president of Paramount Options, a Nymex floor trading firm. "That includes geopolitical events, it includes storms, and it includes the fundamentals of supply and demand."

In many ways, the Nymex appears to operate much as the NYSE, with men (and they are mostly men) in oddly colored jackets gesticulating and hurling paper at one another in a series of pits where trading takes place.

But in reality, the two markets are quite different. At the NYSE, traders exchange actual stock in public companies. At the Nymex, physical commodities almost never wind up changing hands. Instead, participants in the Nymex market simply exchange pieces of paper called futures contracts, which are promises to buy or sell a certain amount of a certain commodity by a certain time.

The Nymex began life in 1872 as the Butter and Cheese Exchange of New York, a place for dairy merchants to gather and trade products. In the late 19th century, the exchange added dried fruit, poultry and other commodities. In the 20th century, national transportation and distribution networks eliminated the need for the thousands of local commodity exchanges.

Only a few big regional players, including the Nymex, remained. They survived by adapting to the new needs of the marketplace. At the Nymex, that meant providing big buyers and sellers of energy products an opportunity to protect themselves from dramatic swings in price.

For instance, giant retail chains that use lots of heating oil might buy a block of futures to lock in a price for the oil. If the retailer's cost of heating oil from a supplier goes up, the value of the futures contracts also should rise, offsetting at least some of the retailer's higher energy costs. According to Carbone, such hedging activity still accounts for the bulk of daily trading at the exchange.

But in the past several years, as returns from stocks and bonds have languished, more speculative investors have flooded the energy market. This can be a good thing, experts say, providing liquidity and ensuring that buyers and sellers can meet at mutually agreeable prices.

But, because buyers and sellers of physical oil and gas rely on prices set at the Nymex, large amounts of speculation can artificially boost prices, leading to higher consumer costs for gasoline and home heating oil.

"Over the last five years there has been a huge move by money managers to own hard assets," said David P. Prokupek, chief executive of Geronimo Partners, a hedge fund and money management firm. "There is a substantial amount of capital in the commodities market that has nothing to do with oil production."

Traders work the oil pit at the New York Mercantile Exchange on Aug. 30, when the daily volume in crude oil futures hit a record of 406,314 contracts in the wake of Hurricane Katrina.