GLOSSARY

The glossary covers common terms and abbreviations from the oil, power,
petrochemicals, nuclear, gas, coal and metals markets and industries.

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - Z

15-Day Brent

The Platts industry glossary is continuously updated. Please let us know
if there is an entry you would like us to add, clarify or expand, or if
you think we have made a mistake in any of our definitions.

The glossary covers common terms and abbreviations from the oil, power,
petrochemicals, nuclear, gas, coal and metals markets and industries.

15-Day Brent

The 15-Day Brent crude oil market is so-called because a seller must
give a buyer a minimum 15 days notice of the intended loading dates for
a cargo of Brent Blend North Sea crude oil in
any particular month traded. 15-Day Brent is traded in discreet months.
At the point where the buyer - who may be at the end of a long trading
chain - is informed of the loading dates, the cargo becomes a so-called Dated Brent cargo.

A/F

Abbreviation for anti-freeze, one of the larger end-uses of monoethylene
glycol.

abandon

To allow an option to expire worthless.

accumulation

A situation in which the market is dominated by buyers, who ‘accumulate’
the commodity they are trading.

AG

See Arab Gulf

AGO

Atmospheric gasoil.

alkylate

A gasoline blending component composed of isobutane and propylene or
butylene.

alternating
current (AC)

A periodic current, the average value of which over a period is zero.
Typically refers to a current that reverses its direction at regularly
recurring intervals of time and that has alternately positive and negative
values. Almost all electricity utilities generate AC electricity because
it can easily be transformed to higher or lower voltages

alternating
current distribution

The supply of electricity from one or more major receiving stations to
the point of consumption. Energy is generally supplied at a voltage that
can be directly used by large rotating machinery and step-down transformers
are used to reduce the voltage for most commercial or residential utilization

American style option

An option which can be exercised by the buyer (holder) at anytime during
its life

ampere (amp)

The unit of measurement of electrical current produced in a circuit by
1 volt acting through a resistance of 1 ohm. The measure of the rate of
flow of electrons past a given point in an electric conductor such as
a power line

ancillary services

Any service required by a system operator to deliver electricity to the
ultimate consumer. Ancillary services include balancing services, load
following, or providing kilovars (reactive power).

Andrew’s Pitchfork

Three parallel trendlines are drawn linking a major low or high with
a point either side of this marking an intermediate high or low. The lines
are extended to generate support/ resistance levels. The lines look a
bit like the prongs of a pitchfork, hence the indicator’s name.

Aniline point

Reports the aromatics content of a mixture.

anode

A rectangular plate of metal cast in a shape suitable for refining by
the electrolytic process.

ANS

Alaska North Slope crude oil.

anthracite

A hard, black coal with high energy content, often referred to as hard
coal

API

Usually: American Petroleum Institute. But note that there is
an Italian oil company called Anonyma Petroli Italiana, universally referred
to in Europe as API.

API gravity

An arbitrary scale expressing the gravity or density of liquid petroleum
products devised jointly by the American Petroleum Institute and the National
Bureau of Standards. The measuring scale is calibrated in terms of degrees
API. Oil with the least specific gravity has the highest API gravity.
The formula for determining API Gravity is:

API gravity = (141.5/specific gravity at 60 degrees F) – 131.5.

APT

Ammonium paratungstate. Intermediate product derived from tungsten concentrates.

ARA

Amsterdam-Rotterdam-Antwerp. Abbreviation commonly used in shipping to
designate discharge or loading at one of these three ports.

Arab Gulf

This phrase and its abbreviation AG are current in some sectors of the
oil industry, especially the tanker world, as a designator for the Persian
Gulf, which is the correct name in international law for the body
of water bordered by the UAE, Saudi Arabia, Qatar, Kuwait, Iraq and Iran.
Note that there is a Gulf of Arabia which is not the same piece
of sea as the Persian Gulf.

Aramco

Technically refers to a now-defunct US-Saudi company. But in practice
widely used to designate the company’s modern-day descendant Saudi
Aramco.

arbitrage

The simultaneous purchase of a commodity/derivative in one market and
the sale of the same, or similar, commodity/derivative in another market
in order to exploit price differentials

aromatics

Group of petrochemicals characterized by a ring structure, produced in
refinery reformers and petrochemical plants. The most commonly traded
are benzene, toluene and xylenes. Used for chemical production or as high-octane
components for gasoline blending.

asph

Occasional abbreviation for asphaltene.

asphalt

1. A mixture of bitumen and mineral aggregate as prepared for the construction
of roads or in other paving uses.

2. In the US, asphalt refers to the product known as bitumen in the rest
of the world.

assay

A chemical test performed on a sample of ores or minerals to determine
the amount of valuable metals contained.

assessment

A Platts assessment is the product of a market survey and the application
of strict methodological rules to determine the repeatable tradable price
range for a commodity during the assessed period. Assessment typically
aims to zero in on these typical transactable levels by discarding unrepresentative
market information (out-of-market bids, offers and transactions), and
the process differs in this respect from indexation, which is an inclusive process, averaging all available market information. Platts produces indexes
in highly liquid markets, for example North American natural gas; and
assessments in illiquid markets, such as those for physical oil. Platts
assessments typically are published as a low-high range for each instrument.
See Platts Guide to Specifications and also Frequently Asked Questions
for details of Platts methodologies.

associated gas

Also known as wet gas. natural gas produced in association with
crude oil. Non-associated gas, or dry gas, is natural gas occurring on
its own. Also, LPG is produced as an associated gas and must be treated
(”dried”) before being used.

at-the-money

An option whose exercise price is equal, or close to, the current price
in the underlying market

AUD

Australian dollar.

availability
factor

In a nuclear power plant, the disposable energy which could have been
generated during a period, expressed as a percentage of the energy which
could have been produced by a continuous power rate during the same period
– essentially relates to the time a reactor spends off line owing
to planned outages or unplanned stoppages..

available but not needed
capacity

Net capability of main generating units that are operable, but not considered
necessary to carry load and cannot be connected to load within 30 minutes

avails

Jargon, short for availabilities, and actually meaning supplies.

average cost pricing

A pricing mechanism based on dividing the total cost of providing electricity
incurred in a period by the number MWh (wholesale) and kWh (retail) sold
in the same period

avgas

High octane aviation gasoline used in piston type aircraft engines.

avoided cost

The cost to produce or procure electric power that an electricity utility
does not incur because it purchases this increment of power from a qualifying
facility. It may include a capacity payment and/or an energy payment component

B/L

See Bill of Lading.

backwardation

A market where the price for nearby delivery is higher than for further
forward months. The opposite of backwardation is contango.

balancing

The requirement imposed by electricity grids or natural gas pipelines
that supply and demand be equal over a certain time period

barge

A vessel carrying oil, usually on rivers, containing between 8,000 and
50,000 bbl, or weighing 1,000 to 10,000 tonnes. In the US, barges can
be up to, and occasionally over, 100,000 bbl in capacity. See tankers for discussion of other vessel sizes.

barrel

A volumetric unit of measure for crude oil and petroleum products. 1
barrel is 42 US gallons, 35 imperial gallons or 159 liters. There are
roughly 7.33 bbl of crude oil to a tonne, but the precise conversion obviously
depends on the specific gravity of the oil.

base gas

See cushion gas.

base load

The minimum amount of electric power delivered or required over a given
period of time at a steady rate. The minimum continuous load or demand
in a power system over a given period of time

base load capacity

The generation units normally used to meet demand around-the-clock.

base load plant

A plant normally operated to take all or part of the minimum continuous
load of a system, and which consequently produces electricity at an essentially
constant rate. A base load plant typically has relatively high fixed costs
and low unit operating costs. Traditionally, nuclear plants have been
considered as base load plants.

base metal

Any non-precious, non-minor metal (eg copper, lead, zinc, nickel, etc)

BBQ

A composite of Bonny, Brass River and Qua Ibo crudes from Nigeria.

Bcf

Billion cubic feet. See natural gas.

bearish

Believing that a price will fall. Also describes a market which shows
signs of falling.

bid

A proposal to buy a commodity/derivative at a specified price.

bid price

The price at which a buyer is prepared to buy.

bill of lading

Documentation legally demonstrating a cargo has been loaded. The bill
of lading is signed by the captain of the ship and the contract supplier.
Abbreviated as B/L.

bio-leaching

A process for recovering metals from low-grade ores by dissolving them
in solution, the dissolution being aided by bacterial action.

biomass conversion

The process by which organic materials, such as wood waste or garbage,
are burned for direct energy or electrical generation, or by which these
materials are converted to synthetic natural gas

bituminous coal

The most common coal, which is dense, black and has a moisture content
of less than 20%. Used for generating electricity, making coke, and space
heating

black start

A rapid start up of an off-line generation source

blackout

The emergency loss of the source of electricity serving an area caused
by failure of the generation, transmission, or distribution system

blendstock

A component combined with other materials to produce a finished refined
product.

blister copper

The product of the Bessemer converter furnace used in copper smelting.
It is a crude form of a copper, assaying about 99% copper, and requires
further refining before being used for industrial purposes.

blowmolding

A process by which polymers are “blown” into a tubular mold.
Also refers to a specific grade of polyethylene, sometimes abbreviated
as bmldg.

Bollinger bands

A system based on the premise that prices revert to their mean. The standard
deviation of the moves away from the mean are used to form two bands around
the price. Whenever the price breaks below or above the band, it is deemed
too extreme a move and therefore liable to correct back from the standard
deviation towards the mean of the price.

BPA

Bonneville Power Authority. Electricity utility in the US Pacific Northwest,
supplying power to several aluminum smelters. Acceptable as second-reference
abbreviation.

breakout

A sudden breakout of prices from a chart pattern that has been forming
for some time. It marks the end of a period of uncertainty. The breakout
point can often be used to guess how far prices will go in that direction.

Brent blend

The most commonly traded North Sea crude oil. Brent has an API of about 37.5. The blend is technically a mix of crude from the Shell
UK-operated Brent field and the BP-operated Ninian field. The blend is,
however, commonly referred to simply as Brent.

British thermal unit
(btu)

British thermal unit. The quantity of heat required to raise one pound
of water (about one pint) one degree Fahrenheit at or near its point of
maximum density. A common unit of measurement for gas prices. 1034 Btus
= 1 cubic foot. An MMBtu (-mil Btus) is roughly equivalent to an Mcf (a
thousand cubic feet). See also therm, dekatherm, natural gas.

brownout

The partial reduction of electrical voltages caused by customer demand
being higher than anticipated or by the failure of the generation, transmission,
or distribution system.

BS&W

Bottom sediment and water, usually expressed as a percentage by weight.
Tanker expression, acceptable on second reference.

Btu

BTX

Benzene, toluene and xylene.

BTX extraction

The process for removing benzene, toluene and xylene from reformate or
pyrolysis gasoline.

bullish

Believing that a price is going to rise.

bunker C

A residual fuel used as ship’s fuel, which usually has a high sulfur
content and high viscosity.

burner-tip

The point at which natural gas is used as a fuel.

burnup

Measure of the total energy released by nuclear fuel per unit of its
mass, typically measured in gigawatt days/mt or gigawatt days/mt of heavy
metal.

busbar

The point at which power is available for transmission. A conductor or
group of conductors that serve as a common connection for two or more
circuits, generally in the form of insulated cable, rigid rectangular
or round bars, or stranded overhead cables held under tension

busbar cost

The cost of producing one kWh of electricity delivered to, but not through,
the transmission system (typically US)

butadiene

A derivative of crude C4s. Butadiene is extracted from the CC4 stream.

C+F

Cost and Freight. A pricing basis in which the buyer pays the cost of
the cargo and the freight costs. See also CIF, FOB and out-turn.

C4s

Carbon 4s. Designates the C4 stream produced by an ethylene plant. Crude
C4s are either co-cracked or sent to a butadiene extraction plant or MTBE
plant.

call option

An option that gives the buyer (holder) the right but not the obligation
to buy a specified quantity of an underlying futures at a fixed price,
on or before a specified date. The grantor of the option is obliged to
deliver the future at the fixed price if the holder exercises the option

candlesticks

A Japanese charting system which maps the open- high-low-and close of
periodic price movements. A box is drawn around the open and close, and
painted white if the close is above the open, and black if the close is
below the open. The boxes and their little heads and tails look like candles
and their wicks. Candlestick studies are full of exotic terms like Morning
Star and Dark Cloud Cover; these describe how the black and white candles
look, and can be interpreted as buy or sell signals.

capacitor

A transmission element designed to inject reactive power into the transmission
network. Also used to increase voltages, reduce loadings, and increase
available kW output from generators. Capacitor ratings typically given
in Megavars.

capacity

The power output rating of a generator, typically in megawatts, measured
on an instantaneous basis.

capacity (purchased)

The amount of capacity available for purchase from other power systems.

capacity charge

One element of a two-part pricing method used in power transactions (energy
charge is the other element. Assessed on the amount of capacity being
purchased, typically in units of currency per MWh.)

capacity margin

The amount of capacity above planned peak system demand available to
provide for scheduled maintenance, emergency outages, system operating
requirements, and unforeseen demand.

capacity release

The temporary relinquishment of firm transportation capacity on a pipeline.
The capacity holder releases the capacity in the open market and accepts
bids for use of that capacity over a specific, limited period of time.

capacity
relinquishment

The permanent relinquishment of firm capacity on a pipeline.

caribs

Tanker market abbreviation for Caribbean.

cash and carry

An arbitrage transaction involving the simultaneous purchase of a cash
commodity with borrowed money and the sale of the appropriate futures
contract.

cash market

The physical market underlying a futures or options contract.

cash settlement

The settlement of futures or options by paying a cash difference, rather
than taking/making physical delivery.

cat cracker

A catalytic cracker.

cat gasoline

A gasoline blending component made in a cat cracker.

catfeed

Feedstock to a catalytic cracker, usually vacuum gasoil.

cathode

In market terms, a rectangular plate of metal, produced by electrolytic
refining, which is melted into commercial shapes such as wirebars, billets,
ingots etc. Copper and nickel are commonly traded and delivered in this
form.

centistoke

Unit of measurement for viscosity, similar to seconds.

cetane

A paraffinic hydrocarbon used as an additive in diesel fuel.

cetane number

Number equal to the percentage by volume of cetane added to basic diesel
fuel to achieve specific ignition performance characteristics.

CFD

See Contract for Differences.

CFPP

Cold filter plugging point.

channel

Like it sounds, a channel in which prices are moving. Parallel trendlines
are drawn along the lows and highs of a price chart, forming a channel
in which prices move. The trendlines form areas of support and resistance.
Depending on the trend, the channel can be a downchannel or an upchannel.

chemical grade

Refers to a particular grade of polypropylene with around 93-94% purity.

China main port

Most petrochemical trade in China is carried out basis China Main Port,
rather than a specific port.

CIF

Cost, insurance and freight charges for shipping products. CIF prices include these charges. See C+F, FOB, out-turn.

circuit

A conductor or a system of conductors through which electric current
flows

city-gate

Physical location where gas is delivered by a pipeline to a local distribution
company.

clearing

The process of matching trades, settling trades and provision of a guarantee
for traded contracts, often a service performed by exchanges

clearing fee

A fee charged by a clearing house for clearing trades

close out

Finalizing a transaction by making an equal and opposite trade to an
open position

cloud point

The temperature at which a fuel, when cooled, begins to congeal and take
on a cloudy appearance caused by the bonding of paraffins.

CME

Chicago Mercantile Exchange. Also known in the energy industry as “the Merc”.

CMP

See China Main Port.

CNG

Compressed natural gas. An automotive fuel, mainly used in Canada and
in transport fleet operations in the US.

CNR

Charterer Not Reported. A tanker market term.

COA

Contract of affreightment between ship owner and charterer.

cofiring

The process of burning natural gas in conjunction with another fuel.
Cofiring can reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions,
the precursors of acid rain.

cogeneration

The production of both electricity and useful thermal energy from the
same energy source. Natural gas tends to be a favored fuel for combined-cycle
cogeneration units, in which waste heat is converted to electricity.

combined cycle

The combination of one or more gas turbine and steam turbines in an electric
generation plant. An electric generating technology in which electricity
is produced from otherwise lost waste heat exiting from one or more gas
(combustion) turbines. The heat is routed to a conventional boiler or
to a heat recovery steam generator for use by a steam turbine in the production
of electricity. This process increases the efficiency of the electric
generating unit

combined heat and power
plant

Power plant, usually embedded, which produces both electric and thermal
energy in the form of steam. See cogeneration.

Commodity Channel
Index

CCI measures the variation of an instrument’s price from its mean. High
/ low values indicate that prices have moved too far from their mean.
The usual range is +/- 100 and anything outside this is overbought or
oversold.

compressed natural
gas

Compressed natural gas used in vehicles and in other applications not
attached to a pipeline.

compressor station

Facility that moves gas through transmission lines or into storage by
creating pressure differentials. Most stations use some of the gas moving
through the line as fuel.

concentrates

A fine, powdery product of the milling process containing valuable metal
and from which most of the waste material in the ore has been eliminated
and discarded as tailings. Often abbreviated to concs.

condensate

Very high API crude “oil”, which in its natural state is in
gaseous form but which condenses to liquid upon production. OPEC has for
many years argued over the precise definition of condensates, since it
does not include them in individual countries’ crude production quotas.
See NGL.

conductor

A substance or body, usually in the form of a wire, cable, or busbar,
that allows a current of electricity to pass continuously along it

congestion

When prices trade at similar levels over a period of time, the chart
becomes cluttered with business at these levels and is referred to as
‘congested’. Congestion areas are often seen as providing support/resistance.
They are the levels at which, rather than breaking into new ground, prices
tend to bog down and become trapped.

connection

The physical junction (transmission lines, transformers, switch gear,
etc) between two electric systems permitting the transfer of electricity

consolidation

All this means is that prices are moving in a broadly sideways range
after a sharp move in one direction. If the prices have risen sharply,
the gains are ‘consolidated’, often for several days after the
major move.

contango

Market situation where prices are higher for forward delivery dates than
for nearer delivery dates. See also backwardation.

Conti Index

Platts demand-weighted index of continental European power assessments.

contract

A binding agreement between a buyer and a seller in a transaction.

contract for differences

Crude oil swap, tied to published price assessments, which exchanges
floating short-term risk for fixed risk.

contract price

Periodic (monthly/quarterly/annual) price agreed between sellers and
buyers of commodities for term business. Often abbreviated to CP. Most
oil contract prices are “floating”, that is they are tied to
spot market assessments published by Platts or other market pricing services
rather than set at outright levels.

coolant

A substance circulating through a nuclear reactor to remove or transfer
heat. Most common coolants are carbon dioxide, water (light), and heavy
water.

CP

See contract price.

crack spread

The simultaneous purchase or sale of crude against the sale or purchase
of refined petroleum products. These spread differentials which represent
refining margins are normally quoted in dollars per barrel by converting
the product prices into dollars per barrel and subtracting the crude price.

cracked

Adjective normally referring to molecules broken by non-distillation
refining processes. See cracking.

cracked fuel

Residue remaining after a straight run fuel has been processed by enhanced
refining methods. See cracking.

cracking

Refining process to break large molecules into smaller ones. Principal
cracking techniques are:

Thermal cracking:

Heating of hydrocarbons to very high temperatures, usually above 450ý
C. Thermal cracking is no longer widely used, except in:

Visbreaking:

Thermal cracking of viscous crude residues to make fuel oil, and in:

Delayed Coking:

Thermal cracking of atmospheric/vacuum residues to make electrode grade
coke.

Catalytic cracking:

Cracking using catalysts to enhance molecule breaking, particularly in
the production of high octane gasoline.

Hydrocracking:

While thermal and catalytic cracking produce shorter hydrocarbon molecules
largely by disposing of the excess carbon atoms, hydrocracking inserts
hydrogen atoms to achieve the same effect.

Steam cracking:

A petrochemical process which produces olefins, particularly ethylene,
and, in some cases, aromatics. Similar to thermal cracking

Co-Cracking:

A petrochemical process in which the c4 stream from an ethylene plant
is recycled into the feedstock.

cubic feet per second

A measurement of water flow representing one cubic foot of water moving
past a given point in one second.

currencies

The following are standard abbreviations used by Platts.

Currency Standard Telex Print

US Dollar $ USD

Cents cts ý

Yen Yen ý

Australian dollar A$ AUD

Singapore dollar S$ S-DLR

Canadian dollar C$ CAN

Hong Kong dollar HK$ HKD

Euro EUR

British Pound GBP ý

French franc FFr

Swiss Franc SFr

Belgian Franc BFr

Deutschmark/Mark DM

Spanish peseta PTA

Dutch guilder NLG

Norwegian Krone NOK

Danish Krone DKr

Swedish Krone SKr

Finnish Markka FIM

European Currency Unit ECU

Italian lire ITL

Greek drachma DRA

Austrian schilling SCH

Portuguese escudo ESC

Malaysian ringgit MR

Rubles Rb

UAE Dirham DH

Not abbreviated:

Baht Thailand

Bolivar

Crown Czech Republic, Slovakia

Dinars Kuwait, Iraq

Dram Armenia

Egyptian Pounds

Forint Hungary

Hryvnya Ukraine

Irish Punt

Kwacha Zambia

Manat Azerbaijan

Peso

Rand

Real

Riyals Saudi Arabia, Oman, Iran

Rupee India

Rupiah Indonesia

Shekel Israel

Som Several former Soviet Union Muslim republics

Tenge Kazakstan

Turkish Lira

Won S. Korea

Yuan China

Zloty Poland

current

A flow of electrons in an electrical conductor. The rate of movement
of the electricity, measured in amperes.

curtailable rate

An option offered by utilities to customers who can accept specified
amounts of service reduction in return for reduced electric rates.

cushion gas

Gas required in a storage pool to maintain sufficient pressure to keep
the working gas recoverable. Also called “base gas”.

custom smelter

A smelter which processes concentrates from independent mines. Concentrates
may be purchased or the smelter may be contracted to do the processing
for the independent company - a process also known as toll smelting.

cycles

Cycle theory is based on the premise that prices are affected by an underlying
cycle. Some of these are well known: the 54-year Kondratieff Wave economic
cycle. Others are less obvious. Commodity indexes are affected by a 10
1/2 month futures cycle (individual commodities do not necessarily follow
this).

cycling

Number of times the same quantity of gas can be injected into and withdrawn
from storage in a set period of time. Certain types of storage fields,
like aquifer and depleted oil and gas fields, need to be filled and largely
emptied during a specific period of time in order to maintain the physical
capabilities of the geologic structure.

DAF

Delivered At Frontier. A popular INCOTERM among eastern European petrochemical
producers. A different railway gauge means product has to be transshipped
before continuing on into western Europe.

dated Brent

Brent cargoes are known as dated Brent cargoes once they acquire a specific set of loading dates, usually at
a point about two weeks from loading. Before this point, Brent cargoes
are typically traded generically as so-called 15-day Brent. The dated
Brent market, which Platts assesses on a 7-15 day forward basis (7-17
days on a Friday), generates prices which have become a key benchmark
for contract pricing of crude oil worldwide.

decay product

An atomic nucleus, stable or radioactive, which originates from the process
of radioactive decay of an unstable nucleus. Sometimes known as a daughter
product.

declining block rate

A fall in an electricity rate when an increase in consumption cuts the
cost to a utility of providing service

degree day

Degree days are measured as the number of degrees above or below a standardized
temperature on any given day. In winter, US traders track heating degree
days week by week, or month by month, normally against a standard
temperature of 65F, on the basis of how many degrees of heat are required
to bring municipal office buildings up to this temperature. Five days
of heating by 2 degrees, for example, equals 10 heating degree days. In
summer, the market tracks cooling degree days.

dehydro-genation

A process by which propylene is made from propane.

dekatherm

A unit of heating value equal to ten therms or 1-mil Btus (1 MMBtu).
Very roughly, 1Mcf = 1 MMBtu = 1Dt.

deliverability

The volume that a particular well, storage field, pipeline or distribution
system can supply during a 24-hour period.

delta hedging

The process whereby the grantor of an option decides to buy or sell more
or less of an underlying futures contract in order to protect against
being declared upon by the options holder. If delta hedging, the grantor
of a call option will buy more of the futures contract if it rises in
value towards the strike price (as the probability of being declared upon
rises towards 100%). The grantor of a put option will typically sell more
of the underlying futures contract if it slides in value (as the probability
of being declared upon rises towards 100%)

delta neutral

A state where the grantor of an option has balanced the probability of
being declared upon through buying/selling the underlying futures contract.

demand

In power: the rate at which electricity is delivered to or by a system
at a given instant or averaged over a designated period, usually expressed
in kilowatts or megawatts.

In oil: the rate of consumption of refined products, normally measured
in millions of barrels per day, or in million tonnes per year.

demand side management (dsm)

All activities or programs undertaken by an electricity system or consumers
to influence the amount and timing of electricity use.

demurrage

The detention or delay of a vessel in loading or unloading beyond the
time agreed upon. Demurrage charges are usually incurred for any delay.

depleted uranium

Uranium where the uranium-235 assay is below the naturally occurring
0.711%. Depleted uranium is a by-product of the enrichment process.

DER

Delivered East of the Rockies. Most US solvents and some intermediates
are sold on this basis.

DERD

Abbreviation for Directorate of Engine Research and Development. DERD
2494 is a UK Ministry of Defense jet fuel specification.

design day

A 24-hour period of demand used as a basis for planning gas capacity
requirements.

diesel index

A measure of the ignition quality of a diesel fuel calculated from a
formula involving the gravity of the fuel and its aniline point.

Differential

The difference between two prices. A large and increasing percentage
of all oil transactions are effected on the basis of differentials, also
known as spreads, rather than outright flat prices.

direct current (dc)

An electricity current that flows in one direction with a magnitude that
does not vary or that varies only slightly.

dirty power

Momentary disturbances in transmission, usually detectable only by sensitive
electronic equipment.

discount

An amount agreed between buyer and seller to be subtracted from an existing
benchmark.

displacement

The substitution of less expensive energy generation for more expensive
generation. Usually this means reducing or shutting down production at
a high cost plant and using cheaper generation when it is available.

distribution

The system of lines, transformers and switches that connect a transmission
network to customer load. The transport of electricity to ultimate use
points such as homes and businesses.

distribution (2)

A state where the market is dominated by sellers, who are holding length
and ‘distributing’ to the players who need to buy.

domestic/retail competition

The competitive sale of gas to residential or small commercial customers,
allowing those customers a choice of supplier other than the local distribution
company. In Europe and the UK the term is domestic competition;
in North America it’s retail competition.

dore bar

The final saleable product of a gold mine, usually consisting of gold
and silver.

double bottom

A bullish reversal pattern characterized by two lows at roughly equal
value.

double top

A bearish reversal pattern characterized by two highs at roughly equal
value.

Dow theory

Theory of market movement developed by Charles Dow that prices move in
defined trends of successive higher peaks and higher troughs in an uptrend,
and lower peaks and lower troughs in a downtrend. Dow divides trends into
primary, secondary and minor. Volume patterns are associated with specific
points in a trend. Dow theory is the foundation of most modern technical
theory.

downtrend

A price pattern characterized by successive falling highs and falling
lows.

dry gas

Natural gas which does not contain liquid hydrocarbons. Gas is usually
priced on a dry basis.

DWT

Deadweight tonnage. See tankers.

E-4

Russian high sulfur straight-run feedstock. Formerly called F-10.

economy energy

Energy sold on a non-firm basis and subject to recall at the discretion
of the selling party.

EFP

Exchange of futures for physical: refers to the exchange of a futures
position for a physical (swap) position.

EIS

See environmental impact study.

electrolytic
refining

The process of purifying metal ingots which are suspended as anodes in
an electrolytic bath, alternated with refined sheets of the same metal,
which acts as starters or cathodes.

Elliott Wave

A theory developed by Ralph Elliott that prices move in a main five-wave
trend followed by a corrective three- wave trend, the extent and scope
of which are governed by certain commonly seen ratios (see Fibonacci).

embedded cost

The historical cost of all facilities in the power supply system.

enabling agreement

An agreement that provides the general terms and conditions for the purchase,
sale, or exchange of electricity but does not list specific contract details
or obligate either party to perform.

energy charge

That portion of the charge for electricity based upon the electrical
energy (kWh) consumed or billed. Also known as the commodity charge.

enriched uranium

Uranium where the uranium-235 assay is above that of natural uranium.
Enriched uranium product refers to enriched uranium resulting from the
enrichment process, ie the process by which the assay of feed material
is increased.

environmental
impact study

A written report, compiled prior to a production decision, which examines
the effects proposed mining activities will have on the natural surroundings
of an exploration property. Abbreviates to EIS.

exercise

The procedure by which an option holder takes up the rights to the contract
and is delivered a long (call) or short (put) futures position by the
grantor at a fixed price.

exit fee

A fee that is paid by a customer leaving a utility network intended to
compensate the utility in whole or part for the loss of fixed cost contribution
from the exiting customer.

expiry (options)

The date by which an option holder must decide whether to exercise or
abandon an option.

exponentially-smoothed
moving average

An average calculated using a system where a percentage of today’s price
is applied to yesterday’s moving average value, eg 9% MA =(today’s close*9%)+(ydy’s
close*91%).

farm-out

An interest in an oil or gas lease that is granted by the lease holder
to a third party.

FAS

Free Alongside Ship. Product is sold when the goods in question are placed
on the quay alongside the vessel. FAS is often traded in the US polymer
export market.

fast breeder reactor

A fast reactor with fertile material loaded around the core, to be converted
into fissile material through neutron capture, which generates more fissile
material than is consumed.

fast reactor

A reactor in which the fission chain reaction is sustained with high-energy
or high-speed (ie fast) neutrons.

FCA

Free Carrier. The rail- and roadfreight equivalent of Free
on Board.

FCC

Fluid catalytic cracker. See cracking.

FCC (2)

First class charterer. Used by tanker brokers to conceal the identity
of a tanker charterer while signaling that the party concerned is a serious
player.

FD

Free Delivered. This is effectively the delivered end of an FCA deal.

feedstock

Raw material used in a processing plant.

feedstock gas

Gas used as a raw material for chemical properties in creating an end
product (like plastics or fertilizer).

FERC

Federal Energy Regulatory Commission. A US federal agency created in
1977 to regulate, among other things, interstate wholesale gas and transportation
of gas and electricity at “just and reasonable” rates. Located
in Washington.

FERC order 636

The 1992 order that unbundled US pipeline services, requiring pipelines
to cease their merchant function and instead become solely a transporter
of gas.

fertile material

Material which can be converted into fissile material by the capture
of a neutron. Sometimes referred to as source or breeder material, examples include uranium-238 and thorium-232.

Fibonacci

Fibonacci levels are commonly observed ratios between the size of a main
trend and retracements. The main ratios are 38.2%, 50%, 61.8%, 100% and
161.8%. These ratios are derived from the number series named after the
Italian mathematician: 1,1,2,3,5,8,13, 21… If the first term is divided
by the one to the right of it, the result gets nearer and nearer to 0.618,
a ratio that recurs in nature and art. Fibonacci levels are used in the
weird and wonderful Elliott Wave Theory.

final disposal

The storage of nuclear waste and/or spent fuel in a repository near the
surface or in a deep geological formation, without the intention of retrieval.

FIP

Free In Pipe. LPG is sometimes sold on this basis.

firm energy

Energy sales which, although not subject to interruption for economic
purposes, may be interrupted under force majeure conditions.

firm gas

Gas sold on a continuous basis for a defined contract term.

firm power

Electricity capacity intended to be available at all times during the
period covered by a guaranteed commitment to deliver, even under adverse
conditions, but subject to force majeure interruptions. Firm power consists
of either firm energy, firm capacity, or both

first core

All the nuclear material required to being initial operation of a reactor.

fissile material

Any element containing an isotope with nuclei capable of undergoing fission
as a result of interaction with slow neutrons in a nuclear reactor. The
two most common examples of such isotopes are uranium-235 and plutonium-239,
but uranium-233 is also important.

fission

The splitting of a heavy nucleus into two (occasionally three) parts
following neutron capture, accompanied by the release of energy, two or
more neutrons, and radiation. The released neutrons may cause the fission
of other fissile atoms, thus creating a chain reaction; this physical
reaction is the basis of nuclear energy generation.

fixed charge

The charge calculated to recover all or a portion of the fixed costs
of a utility, including generation facility and transmission lines, meters,
and some taxes.

flag

A price chart pattern that looks like a flag-pole with a rectangular
‘flag’ hanging off it. It is often seen as a sign that the trend
is likely to continue after a brief consolidation.

flash point

The lowest temperature under very specific conditions at which a combustible
liquid will give off sufficient vapor to form a flammable mixture with
air in a standardized vessel. Denotes the volatility of the product.

flask

Unit and container for measuring mercury, equal to 76lb.

flexibility
mechanism

The UK’s flexibility mechanism, also known as the flex, is operated
by Transco (British Gas) to make sure the amount of gas in the pipeline
remains more or less constant at all times. If the system goes out of
balance, Transco uses the flex to balance the system by buying and selling
gas based on bids and offers submitted by shippers.

flue gas desulfurization unit (scrubber)

Equipment used to remove sulfur oxides from the combustion gases of a
boiler plant before discharge to the atmosphere. Chemicals like lime are
used

FOB

See Free on board.

FOD

Fuel Oil Domestique. The French term for heating oil.

force majeure

Denotes circumstances beyond the control of a company, which force the
breaking of a contract.

forced outage rate

The rate of shutdown of a generating unit, transmission line, or other
facility for emergency reasons or a condition in which the generating
equipment is unavailable for load because of unanticipated breakdown.

Forties

The first substantial oil field discovered in the British sector of the
North Sea. Also used to refer to the crude oil produced from the field.

Free Carrier

The rail- and roadfreight equivalent of free on board.

Free on Board

Usually abbreviated to FOB. FOB prices exclude all insurance and
freight charges. Most oil is sold either FOB (effectively priced at the
loading port) or CIF (effectively priced at the delivery port).

FT

Firm transportation.

fuel assembly

An array or assembly of individual fuel rods containing UO2, MOX or uranium
metal pellets, used in commercial reactors.

fuel cell

A device that generates direct current to electricity by means of an
electrochemical process.

fuel fabrication

The production of reactor fuel, usually in the form of ceramic pellets,
encased in metal tubes which are then arranged in fuel assemblies.

fuel switching

Substituting one fuel for another based on price and availability. Large
industries often have the capability of using either oil or natural gas
to fuel their operation and of making the switch on short notice.

full-forced outage

The net capability of main generating units that is unavailable for load
for emergency reasons.

fusion

The formation of a heavier nucleus from two lighter ones (usually hydrogen
isotopes) with the attendant release of a large amount of energy.

futures contract

An agreement to make or take delivery of a commodity at a fixed date
or strip of dates in the future, at a price agreed upon at the time of
dealing.

g/l

Grams per liter. Also g/ml. Used as a measure of contaminants and to
specify density of refined oil products. Standard German grade gasoline,
for example, is specified as 0.755 g/ml.

gal

Abbreviation for US gallon.

gallon

Generally accepted across the oil industry to refer to a US gallon. There
are 42 US gallons in a barrel. There are 3.78541 liters in a gallon. There
are 1.2 US gallons to the British imperial gallon.

Gann theory

An eclectic blend of fact and fantasy, the works of WD Gann caught on
in the City in the late 1980s. Their chief virtue seems to be that they
are understood by no-one, and so almost anyone can claim to be an expert
in them without recourse.

gas bubble

A fundamental and usually long-lasting oversupply situation. A gas bubble
typically is responsible for long-term depressed prices.

gas-gathering

Gas-gathering systems on oilfields typically are designed to stream off
associated gas from the crude.

gasoil

An intermediate distillate product used for diesel fuel, heating fuel
and sometimes as feedstock. In US parlance: No. 2 Heating Oil.

gasoline

Volatile motor fuel used in cars. See also octane
number.

generation

The process of producing electricity by transforming other forms of energy
such as steam, heat or falling water. Also, the amount of electricity
produced, expressed in kilowatt-hours (kWh) or megawatt-hours (MWh).

generator

A producer of electricity, both literally and figuratively.

geothermal

Power generated from heat energy derived from hot rock, hot water, or
steam below the earth’s surface.

gigajoule (GJ)

A joule is an international unit of energy defined as the energy produced
from one watt flowing for one second. A very small unit of energy, there
are 3-6-mil joules in a kilowatt-hour. For gas, one gigajoule = 0.96 Mcf
under standard temperature and pressure conditions. Roughly, one gigajoule
(Gj) = 1 Mcf; one petajoule (Pj) = 1 Bcf; one exajoule (Ej) = 1 Tcf.

gigawatt

One gigawatt equals 1-billion watts, 1-million kilowatts, or 1,000 megawatts.
Abbreviates to GW.

gigawatt hour (gwh)

One billion watt-hours.

gigawatt-hour

One gigawatt-hour equals one billion watthours. Abbreviates to GWh.

GOB

Good Ordinary Brand. A grade of zinc, less pure than the LME-deliverable
SHG grade.

gold loans

A form of debt financing whereby a potential gold producer borrows an
amount of gold from a lending institution, sells the gold on the open
market, uses the cash for company purposes (ie building a mine), then
pays back the gold from actual mine production.

GOM or GM

Gasoil Moteur - French gasoil specification.

g-p

General purpose. Refers to a grade of polystyrene. Abbreviated as GP-PS.

grid

The layout of an electrical transmission system or a synchronized transmission
network

Grosskrotzenburg

Lies just south of Frankfurt-am-Main. The single connection point between
grids operated by RWE, PreussenElektra and Bayernwerk.

Group 3

Formerly three railroad companies in Tulsa, Oklahoma. Group 3 now refers
to the pipeline price of petroleum commodities from Tulsa to Minnesota
in the US.

HDA

Hydrodealkylation, a process used for making benzene from toluene.

head and shoulders

A reversal pattern characterized by a high, a higher high, a lower high,
and a break below the line joining the lows between the highs, the so-called
neck-line.

heap leaching

A process whereby valuable metals (usually gold and silver) are leached
from a heap (or pad) of crushed ore by leaching solutions percolating
down through the heap and are collected from a sloping, impermeable liner
below the pad.

heavy crude oil

Has an API gravity of less than 28 degrees. The lower the API gravity,
the heavier the oil.

heavy metals

Metallic elements with atomic numbers equal to or higher than uranium,
used as a collective term to provide interdependence of the exact chemical
form.

heavy water

Water containing significantly more than the natural proportion (1 in
6500) of heavy hydrogen (deuterium) atoms to ordinary hydrogen atoms.
Heavy water is used as a moderator in some nuclear reactors.

hedge

The reduction of risk by covering anticipated commitments at a fixed
price in the future through a futures or options contract. Buyers and
sellers can hedge

Henry Hub

A pipeline interchange near Erath, Louisiana, where a number of interstate
and intrastate pipelines interconnect through a header system operated
by Sabine Pipe Line. It is the standard delivery point for the NYMEX natural gas futures contract in the US.

highly enriched uranium

Any form of uranium with a uranium-235 concentration of 20% or higher.
The 20% enrichment level has been established as a threshold above which
material assumes particular importance from a non-proliferation standpoint
and is subject to special legislation with regard to export licenses,
physical protection and safeguarding.

HIPS

High-impact polystyrene.

HLS

Heavy Louisiana Sweet, a US crude oil.

HO

Heating oil. Number 2 heating oil is essentially the same product as gasoil.

Hormuz

The Strait of Hormuz is the sea-passage out of the Persian Gulf between
Iran on the eastern shore and the UAE and Oman on the west.

HSFO

High sulfur fuel oil. Typically fuel oil containing 3.5% sulfur.

hub

A geographical location where multiple participants trade services.

hydroelectric
plant

A plant in which the turbine generators are driven by falling water.

impedance

The opposition in an electrical circuit to the flow of alternating
current (AC).

initial margin

The returnable collateral required to establish an options position.

inj

Abbreviation for injection grade in plastics.

in-lieu energy

Energy exchanged between a reservoir owner and the owner of a downstream
project. The agreement allows reservoir owners to retain water above a
reservoir’s energy content curve; however, owners of downstream projects
may request release of such water.

interconnection

Facilities that connect two electricity grid systems, gas pipelines or
control areas.

Interconnector,
(the European)

A 238-km pipeline providing a strategic link between the UK and continental
Europe, connecting the two gas transmission systems at Bacton in the UK
and Zeebrugge in Belgium. Capacity from the UK to Europe is 20-bil cu
meters per year; from Europe to the UK about 9-bil cu meters.

intermediate load

The range from base load to a point between base load and peak. This
point may be the midpoint, a percent of the peakload, or the load over
a specified time period.

interruptible
demand

The amount of customer demand that, in accordance with contractual arrangements,
can be interrupted by direct control of the system operator, remote tripping,
or by action of the customer at the direct request of the system operator.

interruptible gas

Gas sold to customers with a provision that permits curtailment or cessation
of service at the discretion of the supplier.

in-the-money

An option which has intrinsic value. A put option is in-the-money when
its strike price is above the value of the underlying futures contract.
A call option is in-the-money when its strike price is below the value
of the underlying futures contract.

intrinsic value

The value to an option holder if (s)he were to exercise an option today.

inverse head and shoulders

A bullish reversal pattern characterized by a low, a lower low, a less
low low, and a breakout to the upside.

IPE

The International Petroleum Exchange in London.

IPP

Independent power producers – unregulated power generators which,
unlike utilities, have no franchised retail service territories. Even
a plant built by an investor-owned utility to serve its native retail
load is not an IPP. It’s still a utility plant. Also, utilities that
form affiliates and build outside of their territories can be IPPs.

irradiated fuel

Nuclear fuel which has been loaded into a reactor and has undergone a
sustained chain reaction.

isomer

A compound with the same chemical composition and molecular weight as
another compound, but with a different molecular structure. For example: orthoxylene and paraxylene.

isomerate

Mixed xylenes used as gasoline blendstock. Made in an isomerization unit.

isomerization

Typically, the process of separating mixed xylenes into orthoxylene and
paraxylene.

isotopes

Different forms of atoms of the same element. Each element has the same
number of protons in its nucleus, but the number of neutrons varies in
almost all elements and this determines the isotope.

IT

Interruptible transportation.

ITT

In-tank transfer.

joint venture

Typically abbreviates to JV.

joules

A measure of energy equal to 1 watt second

kero

Kerosene.

kilowatt

One kilowatt equals 1000 watts. Abbreviates to kW.

kilowatt (kw)

A unit of electricity equal to one thousand watts.

kilowatt year (kw-y)

A unit of electrical capacity equivalent to one kilowatt of power used
for 8760 hours.

kilowatt-hour

The basic unit for pricing electric energy, equal to one kilowatt of
power supplied continuously for one hour (or the amount of electricity
needed to light ten 100-watt lightbulbs for one hour). One kWh equals
1,000 watthours. One kWh = 3.306 cu ft of natural gas. An average household
will use between 800-1300kWh/month.

kt

Abbreviation for one thousand tonnes.

lambda

The measure of the rate at which fuel is consumed relative to electric
output, expressed in Btu’s per kWh.

landed cost

The total cost of oil off-loaded at a port, including duties, fees and
taxes.

Laufenburg

An electricity delivery hub in Switzerland, divided between Laufenburg
National and Laufenburg International.

laycan

The range of dates during which a ship will load.

lb

Pound, unit of measurement for a number of metals and petrochemicals,
eg cts/lb, lb/year.

lending

In a futures market, selling a nearby contract while at the same time
buying an equivalent forward contract. The opposite strategy, buying nearby
and selling forward, is known as borrowing.

LIBOR

London Interbank Offered Rate. LIBORs are forward foreign exchange interest
rates.

lifting

The act of loading petroleum or petroleum products at a terminal or transfer
point.

light crude oil

Has an API gravity higher than 33 degrees. The higher the API gravity,
the lighter the crude oil.

light ends

Group of petroleum products with the lowest boiling temperatures, including
gasolines and distillate fuels.

lignite

A brownish-black coal of low rank with high inherent moisture and volatile
matter (used almost exclusively for electric power generation). It is
also referred to as brown coal.

liquefied natural
gas

See LNG.

liter

A liter is 1,000th of a cubic meter. There are 3.78541 liters in a gallon.
Convert to barrels instead. One thousand liters=6,289.8 bbl.

LLS

Light Louisiana Sweet. A US crude oil.

LME

London Metal Exchange.

LNG

Liquefied natural gas. Natural gas converted to a liquid state by pressure
and severe cooling, then returned to a gaseous state to be used as fuel.
Acceptable first reference abbreviation. LNG is moved in tankers, not
via pipelines. LNG, which is predominantly methane, artificially liquefied,
is not to be confused with NGLs, natural gas liquids, heavier fractions
which occur naturally as liquids. See also natural gas, NGL, LPG.

load

The amount of electricity delivered or required at any specific point
or points on a system. The load of an electricity system is effected by
many factors and changes on a daily, seasonal, and annual basis, typically
following a pattern. System load is usually measured in megawatts (MW).

load curve

A curve of power versus time showing the level of a load for each time
period covered. The horizontal axis is time and the vertical access is
load (MW).

load factor

The ratio of average load to peak load during a specific period of time,
expressed as a percent. The load factor indicates to what degree energy
has been consumed compared to maximum demand or the use of units relative
to total system capability. An system’s load factor shows the variability
in all customers’ demands.

load management

The management of load patterns in order to better use the system. Generally,
load management attempts to shift load from peak use periods to other
periods of the day or year.

load shape

Variations in the power load over a daily, weekly or annual period.

loaning

Allowing a customer to take gas and return it at a future state. Usually
a service provided at a market hub.

long

Traders are said to be long when they have contracted to buy more
of a commodity or instrument than they have contracted to sell.

long-run marginal
costs

All costs associated with the lowest cost incremental unit including
variable production costs and capital costs.

loop flow

The tendency of electricity to flow along the path of least resistance,
which may not necessarily be the same as that intended in the contract
between the two transmitting entities. If power sold along a contractual
path goes a different physical path, the power-flow may interfere with
control of the systems which were unaware of the contractual power transfer.

loss of load probability (lolp)

A measure of expectation that system demand will exceed capacity during
a given period, often expressed as the expected number of days per year.

LPG

Liquefied petroleum gas, typically ethane, propane butane and isobutane.
Usually produced at refineries or natural gas processing plants, including
plants that fractionate raw natural gas plant liquids. LPG can also occur
naturally as a condensate.

LR

Large/long range tanker, 45,000-159,999-dwt. Divided into LR1 (45,000-79,999-dwt),
and LR2 (80,000-159,999-dwt). See also tankers.

LSFO

Low sulfur fuel oil, usually 1% sulfur or less.

LSWR

Low sulfur waxy residual fuel oil.

LVN

Light virgin naphtha.

MACD (moving average convergence
divergence)

A trend following momentum indicator that maps the difference between
two exponential moving averages, the 26 and 12-day. A nine-day exponential
moving average is plotted on top of this as a ’signal’ line to show buy/sell
opportunities.

marginal cost pricing

A system of pricing designed to ignore all costs except those associated
with producing the next increment of power generation. Sometimes referred
to as incremental cost pricing.

marginal price of energy

Price for power from a unit which is already running. (System Lambda
+ markup).

market-area storage,
or hub

Storage facilities or hub located near gas users (markets).

mark-to-market

To revalue futures/option positions using current market prices to determine
profit/loss. The profit/loss can then be paid, collected or simply tracked
daily (see variation margin).

mcf

One thousand cubic feet of natural gas.

Med

Market abbreviation for Mediterranean.

megawatt (mw)

A unit of electrical power equal to one million watts or one thousand
kilowatts.

megawatt-hour (mwh)

One million watt-hours of electricity. A unit of electrical energy which
equals one megawatt of power used for one hour.

mmbtu

One million British thermal units.

mmcf

One million cubic feet of natural gas.

MMS

The US Minerals Management Service, an agency of the Interior Department.

moderator

A component of some nuclear reactor types which slows neutrons, thereby
increasing their chances of fissioning fissile material.

mogas

Used in some markets as a substitute term for gasoline.

momentum

The simple difference between the price now and the price N days ago.
Momentum is negative if the price now is below the price N days ago, and
positive if it is above.

MON

Motor Octane Number. See octane number.

MOPAG

Mean of Platts AG. The mean of the high and low components of a Platts
assessment for oil cargoes loading from the Persian Gulf (Arab Gulf).
Often used as a component in floating price deals.

MOPS

Mean of Platts Singapore. The mean of the high and low components of
a Platts assessment for oil cargoes loading from Singapore. Often used
as a component in floating price deals.

mothball

To place a generating facility in an inactive state so that it can neither
be brought into operation immediately nor counted towards reserve margin

moving average

The mean of prices over a pre-defined period, for instance, the previous
five days. The moving average for different time periods can be charted
to generate short- and medium-term buy/sell signals. For instance, funds
have in the past tended to buy when the price crosses the 40-day moving
average from below, and to sell when it cuts the average from above.

moving average crossover

The point where a short moving average crosses a longer-moving average.
These are often taken as buy or sell signals. When the shorter MA crosses
the longer from below and both are turning upwards, it is called a Golden
Cross, a strong buy signal.

moving average envelopes

Envelopes use moving averages which are sifted up or down by a certain
percentage to establish a certain ‘normal’ band in which the price moves.
If prices break out of these, they tend to revert to the mean.

MR

Medium range tanker, 25,000-49,999-dwt. See tankers.

MR (2)

Malaysian ringgit, the Malaysian unit of currency.

mt

Metric tonne.

MTBE

Methyl tertiary butyl ether - an octane booster and oxygenate used
for gasoline blending.

municipal utility

A utility owned and operated by a municipality or group of municipalities

N&A

Naphthenes and aromatics.

nameplate capacity

The full-load continuous rating of a generator or other electric power
production equipment under specific conditions as designated by the manufacturer.
Installed generator nameplate rating is usually indicated on a nameplate
physically attached to the generator

naphtha

Straight-run gasoline fractions. Used as a feedstock for reforming and
as a petrochemical feedstock.

naphthenic

High in naphthenes.

naphthenic naphtha

Favored form of reformer feedstock naphtha.

National Balancing
Point

An imaginary point on the UK Transco pipeline through which all gas is
deemed to flow, and about which all gas is balanced. NBP is the delivery
point for the IPE’s natural gas futures contract.

National Energy Board

The Canadian regulatory body which oversees interprovincial natural gas
trade and pipelines. Located in Calgary, Alberta.

natural gas

Naturally occurring gas, predominantly methane, but usually containing
some proportions of ethane, propane and butane. Natural gas can be either
associated gas or non-associated.

natural gas

A naturally occurring mixture of hydrocarbon and non-hydrocarbon gases
found in porous geological formations beneath the earth’s surface, often
in association with petroleum. The principal constituent is methane

natural gas measurements

The following are some of the standard abbreviations used in natural
gas measurement.

Mcf: standard abbreviation for 1,000 cubic feet.
Bil cu ft: Billion cubic feet. Also abbreviated to bcf.
Tcf: trillion cubic feet.
Cu m: cubic meter.
bil cu m: billion cubic meters. Also abbreviated to bcm.
Tcm: trillion cubic meters.
quad or quads: quadrillion cubic feet.
MMBtu: Million British thermal units.
Dt: Dekatherm

net capability

The maximum load-carrying ability of a power plant under specified conditions
for a given time interval. Capability is determined by design characteristics,
physical conditions, energy supply and operating limitations such as cooling
and circulating water supply and temperature, headwater and tailwater
elevations, and electrical use

net generation

Gross generation less the electric energy consumed at the generating
station for station use.

net smelter return

The interest in a mining property held by the vendor on the net revenues
generated by the sale of the metal produced by the mine.

network

An interconnected system of electrical transmission lines, transformers,
switches and other equipment connected in such a way as to provide reliable
transmission of electricity.

NGL

Natural gas liquids. Can include ethane, propane, butane, isobutane and
natural gasoline/condensate. Not to be confused with LNG,
liquefied natural gas. LNG is artificially liquefied methane, not the
heavier fractions defined as NGLs.

nuclear fuel

All fissile material in any chemical form and the hardware required to
produce fuel for a reactor.

nuclear fuel

Fissionable materials that have been enriched to such a composition that,
when placed in a nuclear reactor, will support a self-sustaining fission
chain reaction, producing heat in a controlled manner for process use

nuclear power plant

A facility in which heat produced in a reactor by the fissioning of nuclear
fuel is used to drive a steam turbine

nuclear reactor

A device in which a fission chain reaction can be initiated, maintained
and controlled. Nuclear reactors are used in the power industry to produce
steam for electricity

nuclear waste

Radioactive substances generated at different stages of the nuclear fuel
cycle, which are considered to have no further potential use.

NWE

Oil and petrochemicals market abbreviation for Northwest Europe.

NYH

New York Harbor.

NYMEX

New York Mercantile Exchange. Also known in the energy industry as “the
NY Merc”.

o/r

Operating rate.

octane number

A measure of the detonative quality of gasoline, or otherwise expressed
its tendency to cause “engine knock.” The higher the octane
number, the higher the resistance to engine knock. Octane numbers come
in two forms: Research octane number reflects fuel performance
under moderate driving conditions, while the tests for motor octane
number reflect high speed driving conditions. Tests for both numbers
are in fact performed in the laboratory.

offer

An indication of willingness to sell a specified amount of a commodity
at a specific price

off-peak

Light load hours. The time of the day when an power system would experience
its lightest load, usually in the middle of the night

offset

An offset deal is, normally, one in which a vendor government
“offsets” the cost of an arms sale to a purchaser government
by undertaking to invest in the purchaser country (or to persuade vendor
country companies to do so). Offset investment is normally not in the
arms sector, and typically involves technology transfer.

Ofgem

UK regulatory body which oversees electricity and gas trade, pipelines
and the power grid. Located in London. Combines the former Offer and Ofgas
regulators.

ohm

The unit of measurement of electrical resistance. The resistance of a
circuit in which a potential difference of 1 volt produces a current of
1 ampere

olefins

Class of double-bonded aliphatic hydrocarbons made by cracking naphtha,
LPG or gasoil at high temperatures. Occur in gaseous form. The main olefins
are ethylene and propylene.

On Balance Volume

OBV is a momentum indicator relating volume to price change. If prices
rise, volume is considered up-volume; if price, it is considered down-volume.
Up-volume is added to the cumulative total, and down-volume is subtracted.

OPEC

Full name is The Organization of the Petroleum Exporting Countries. Group of crude-producing countries which has used its collective weight
of production since OPEC was founded in 1960 in an attempt to influence
oil prices. Current membership (May 2000): 11 countries - Algeria,
Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE,
Venezuela. Ecuador resigned from OPEC in 1992, Gabon in 1995. Founder
members were Saudi Arabia, Iran, Iraq, Kuwait and Venezuela.

open interest

The number of contracts left open in a market which need to be closed
out or taken through to delivery

open interest

Open interest is the number of open contracts on a given future or options
contract. Longs or shorts that have not been closed out are OI. Short-covering/profit-taking
will tend to reduce OI.

open outcry

A trading system in which members trade verbally on a trading floor

open pit

A surface mine, open to daylight, such as a quarry. Also referred to
as open-cut or open-cast mines.

operating reserve
margin

The amount of unused available capability that can be applied to the
system within ten minutes at peakload for a utility system, expressed
as a percentage of total capability

optimization

A technique used by technical analysts to decide on which measures work
best in their specific markets. For instance, the 40-day moving average
might generate good signals for oil and commodity markets, but not foreign
exchange markets. BY using optimization software, traders hope to work
out which measures work well for their specific instruments.

oscillator

The difference between two indicators. For instance, a moving average
oscillator would reflect the difference between two moving averages. The
oscillator ranges around a single line.

out-the-money

An option which has no intrinsic value. A put option is out-of-the-money
when its strike price is below the value of the underlying futures contract.
A call option is out-of-the money when its strike price is above that
of an the underlying futures contract

out-turn

The quantity of oil unloaded from a vessel at its discharge point. Out-turn pricing allows the buyer to pay only for the oil measured into receiving
tanks. The amount of oil loaded on the tanker becomes irrelevant.

oxygenate

Oxygen-containing blend stocks favored for their octane and their clean
burning quality. Oxygenates Include MTBE and ethanol.

oxygenated
gasoline

Gasoline containing more oxygen than pre-1990s formulation. Oxy-specified
gasoline in the US contains 2% oxygen, and is intended for use in winter
months in northern US states. reformulated gasoline contains 2.7% oxygen,
and is designed for year-round use in metropolitan areas.

P&C

Private and confidential. Used by commodities traders to describe non-public
transactions.

P/C

Part-cargo.

PADD

Petroleum Allocation for Defense District. A group of five geographic
areas in the US used in reference to petroleum distribution.

paraffinic

High in paraffins

paraffinic naphtha

Favored quality of naphtha for ethylene plant feedstock.

parking

Providing a customer with temporary gas storage, typically at a market
hub.

peak demand

The maximum load during a specified period of time

peak load

The maximum electrical load demand in a stated period of time. On a daily
basis, peak loads occur at midmorning and/or in the early evening

peak load plant

A plant usually housing low-efficiency, quick response steam units, gas
turbines, diesels, or pumped-storage hydroelectric equipment normally
used during the maximum load periods. Characterized by quick start times
and generally high operating costs, but low capital costs

peaking capacity

Capacity of generating equipment normally reserved for operation during
the hours of highest daily, weekly, or seasonal loads.

pennants

A price chart pattern that looks like a vertical line with a small triangle
at the top. It is seen as a sign that a trend will continue after a brief
consolidation.

PEP index

Platts demand-weighted index of all European electricity assessments

petrochemicals

Chemicals derived from petroleum; feedstocks for the manufacture of plastics
and synthetic rubber. Petrochemicals include benzene, toluene, xylene,
styrene, and methanol. Abbreviations for the major petrochemicals are:

AA Acetic acid

ACN Acrylonitrile

ABS Acrylonitrile-butadiene-styrene

BD Butadiene

CC4s Crude C4s

IPA Iso-propyl-alcohol

IBA Iso-butanol

MEG Monoethylene glycol

MEK Methyl ethyl ketone

MIBK Methyl isobutyl ketone

MMA Methyl methacrylate

MDI Diphenyl methane diisocyanate

MX Mixed xylene

NBA Normal butanol

PE Polyethylene

LDPE Low density polyethlene

LLDPE Linear low density polyethylene

HDPE High density polyethylene

PP Polypropylene

PS Polystyrene

PVC Polyvinyl chloride

SX Solvent xylene

TDI Toluene diisocyanate

VX Virgin xylene

PFG

Abbreviation of German pfennig, 1/100^th of a Mark.

physical delivery

The transfer of ownership of an underlying commodity between a buyer
and seller to settle a futures contract following expiry.

pl

Pipeline.

plutonium

An element with atomic number 94 formed as a by-product of nuclear fission
in reactors. Plutonium has several isotopes, the most common of which
is plutonium-239.

point-and-figure

A charting system which ignores time and displays only the main price
changes. They comprise alternate columns of 0s(falls) and Xs (gains).
Parameters used are box-size and reversal size.

polymers

Plastics made from monomers. The most common include widely traded plastics
like polyethylene, polypropylene and polystyrene.

pooling point

The place where natural gas is aggregated from many receipt points to
serve a number of contracts without tying a particular receipt point to
a particular contract.

postage stamp rate

A rate for electric transmission that does not vary according to distance
from the source of the power supply. So-called because postage stamps
for letters are typically at a fixed price, regardless of destination.

posted price

Outright, non-market-related price requested by a seller of crude oil
or products. Effectively, the list price.

pour point

Lowest temperature at which oil will readily flow without disturbance
when chilled.

ppm

Parts per million. Typically used to designate amount of metals or other
impurities in refined oil products.

PPT

See prompt.

prem

Abbreviation for Premium.

premium

An additional amount agreed between buyer and seller over and above an
existing benchmark. Also, the price paid by an option holder to an option
grantor.

price cap

A method of setting a utility distribution company’s rates where a maximum
allowable price level is established by regulators, flexibility in individual
pricing is allowed, and where efficiency gains can be encouraged and captured
by the company

primary/secondary

In metals, primary metal refers to metal produced from mined ore, as
opposed to secondary metal, which is produced from secondary sources,
mainly scrap.

prime mover

The engine, turbine, water wheel or similar machine that drives an electric
generator; or, for reporting purposes, a device that converts energy to
electricity

prompt

A prompt cargo describes a cargo available for immediate lifting
(one to two days). Prompt tonnage refers to tankers available to
lift cargoes immediately. The tanker and petrochemical world’s abbreviation
is PPT.

PRT

Britain’s Petroleum Revenue Tax.

pumped-storage
hydroelectric plant

A plant that generates electricity by using water pumped during off-peak
periods into an elevated storage reservoir. At peak periods, when additional
generating capacity is needed, the water is released from the elevated
storage reservoir to turbine generators in a power plant at a lower elevation.
A hydroelectric power plant that uses both pumped water and natural stream
flow to produce electricity is a Combined Pumped-Storage Hydroelectric
Plant.

put option

An option that gives the holder the right (but not the obligation) to
sell a specified quantity of the underlying instrument at a fixed price,
on or before a specified date. The grantor of the option has the obligation
to take delivery of the underlying instrument if the option is exercised.

puts/calls ratio

The ratio of puts to calls in an options market.

pygas

Pyrolysis gasoline: a naphtha-range product with a high aromatic content,
used either for gasoline blending or as a feedstock for a BTX extraction
unit. Pygas is produced in an ethylene plant which processes butane, naphtha
or gasoil.

Qua Ibo

A Nigerian crude oil, with an API of about 35.9.

quota

OPEC sets individual crude oil production quotas for each of its 11 members.
These quotas do not include condensate production.

R+M/2

Research Octane Number plus Motor Octane Number divided by 2, also known
as the “anti-knock index.” See octane
number.

rack price

The price of petroleum products at a refinery loading rack. Rack-pricing is effectively cash and carry at the rack.

radioactive decay

The spontaneous nuclear transformation in which an atom emits particles
or radiation following orbital electron capture, or when the nucleus undergoes
spontaneous fission. When several such transformations occur in series,
this is called a decay chain.

raffinate-1,
raffinate-2

By-products of butadiene extraction, the former being a key feedstock
in production of MTBE.

rally

A rapid rise in a price.

random walk

Theory that market prices move randomly around a main trend, in other
words, that the volatility is arbitrary.

Rate of Change of Prices

This is a simple momentum-type indicator. It is the simple momentum over
n days divided by the price n days ago.

reactor types

Nuclear reactors may be divided into two main types, fast and thermal.

A fast reactor is a reactor in which the fission chain reaction
is sustained with high-energy or high-speed (ie fast) neutrons. It is
capable of converting unused fertile uranium-238 into fissile plutonium,
a process known as breeding on fast breeder reactors

A thermal reactor is a reactor in which the fission chain reaction
is sustained with moderated (slow or “thermal”) neutrons. There
are four main types in use: light water reactors, which account for over
90% of those in operation; CANDU pressurized heavy water reactors; gas-cooled
reactors (GCR, and ACR); and the RBMK light water graphite reactor.

REC

Regional electric company. Term used in the UK to describe producers
of electricity in the county’s specific regions. Also sometimes refers
to owners of transmission assets.

re-enrichment

Enrichment of uranium previously enriched or depleted.

ref

Market abbreviation for refinery, used for example in contracts
specifying material sold ex-refinery: ex-ref.

refinery

In oil, a plant, usually comprising distillation units and a variety
of additional specialist units, for the manufacture of so-called refined
products from crude oil. Major refined products include naphtha, gasoline,
gasoil (heating oil), jet fuel, low sulfur and high sulfur fuel oil.

In copper and lead, a refinery is a plant which further purifies metal
produced in a smelter. In zinc, it is a plant which produces purer metal
than could be produced in a smelter. In aluminum, it denotes a plant which
refines bauxite into alumina.

reformate

A high-aromatic, high-octane product made in a reformer and used to blend
motor gasoline or aviation gasoline.

reg

Abbreviation for Regular gasoline. Usually leaded.

reg unl

Abbreviation for Regular unleaded gasoline.

regassification
point

A plant the accepts deliveries of liquefied natural gas (LNG)
and processes it back to gaseous form for injection into the pipeline
system.

Relative Strength
Index

This has become one of the most widely used and popular of technical
indicators. It was invented by Welles-Wilder, and uses a simple equation
comparing the average up moves in the market to the average downmoves
to give a single RSI number for a certain period. The 14-day RSI is widely
used. RSIs of 20-30% tend to indicate the market is oversold, while those
of 70-80% indicate it is overbought.

renewable source

A power source that is continuously or cyclically renewed by nature.
Solar, wind, hydroelectric, geothermal and biomass electricity generation
are example of renewable energy sources.

reserve capacity

Extra generating capacity available to meet unanticipated demands for
power or to generate power in the event of loss of generation

Reserves

The calculated quantity of hydrocarbons or minerals which can be extracted
profitably from a deposit, classified according to the level of confidence
that can be placed in the data. Standard classifications are:

Proven reserves – Reserves that have been sampled extensively,
for example–in mining–by closely spaced diamond drill holes or by underground
working giving an accurate picture of size and quality of reserves. Also
called measured reserves. In oil, proven reserves are an estimate
based on seismic and other exploratory data, linked to an assessment of
economic and operating viability.

Recoverable reserves – In oil and gas, the portion of a field’s
total estimate reserves that can actually be recovered from the field using
currently available technology. Recoverable reserve estimates are dependent
on factors such as reservoir pressure and the density of strata.

Probable reserves – Valuable mineralization not sampled
enough to estimate accurately the terms of tonnage and grade. Also called
indicated reserves.

Possible reserves – Valuable mineralization not sampled
enough to estimate accurately its tonnage and grade, or even verify its
existence. Also called inferred reserves. In oil, possible reserves are
an estimate of reserves from an undrilled site or one that has not bee
seismically tested.

reservoir

In oil, a naturally occurring geological formation containing hydrocarbon.
In power, a structure (usually a dam) which stores water for later use
in the production of electricity.

resids

Oil market jargon for residual fuel oils.

resistance

A price at which sellers are likely to enter the market in an uptrend.

retail competition

See domestic competition.

retracement

A temporary move in the opposite direction to that of the main trend.
These are often

reverse tolling

When a gas pipeline recalls gas used for electric generation and diverts
it to end-use markets when gas prices are higher than power prices.

RFG

Reformulated gasoline. US specified gasoline formulated with a higher
oxygen content than pre-1990s gasolines. RFG is specified to contain 2.7%
oxygen, and is designed for year-round use in urban areas. So-called oxygenated
gasoline is specified with a 2% oxygen content, and is intended for winter
use. The abbreviation RFG is acceptable in headlines and on first
reference in market reports.

RNR

Tanker abbreviation for rate not reported.

roll over

The transfer of a position from one futures period to another involving
the purchase (sale) of the nearby month and simultaneous sale (purchase)
of a further-forward month.

RON

Research octane number. See octane number.

run-of-river plant

A hydroelectric plant which depends chiefly on the flow of a water stream
as it occurs for generation. Differs from a storage project (such as a
hydroelectric dam), which has space available to store water from one
season to another. Some run-of-river projects have a limited storage capacity
(pondage) which permits them to regulate streamflow on a daily or weekly
basis.

RVP

Reid Vapor Pressure, a measure of a gasoline’s volatility.

s/d

Occasionally used abbreviation for shutdown.

salting

The act of introducing metals or minerals into a deposit or samples,
resulting in false assays, done either by accident or with the intent
of making fraudulent claims about a deposit’s value.

secondary market

In natural gas, the trading of transportation capacity.

settlement price

A price established at the close of a trading day used to calculate the
settlement of futures contracts.

short

Traders are said to be short when they have contracted to sell
more than they contracted to buy.

SIMEX

The Singapore Monetary Exchange.

smelter

In copper, lead, and zinc, a plant which reduces concentrate to metal.
In aluminum, a plant which upgrades alumina into metal.

solar generation

The use of the sun’s radiation to generate electricity.

solvent
extraction-electrowinning

A metallurgical technique, so far applied only to copper ores, in which
metal is dissolved from the rock by organic solvents and recovered from
solution by electrolysis.

sour/sweet crude

Definitions which describe the degree of a given crude’s sulfur content.
Sour crudes are high in sulfur, sweet crudes are low.

sour/sweet gas

Sour gas is natural gas which contains lethal hydrogen sulfide, and must
be purified before being injected into a pipeline. Sweet gas is gas found
in its natural state which does not need to be purified to remove sulfur-bearing
compounds.

spark spread

Basically, the cost difference of converting natural gas into electricity.
It can also be the difference between gas and electricity futures prices.
Marketers use the spark spread as an arbitrage opportunity, using tolling
or reverse tolling.

spill

Release of water from a reservoir over a spillway rather than putting
it through turbines to generate electricity. A spillway is the overflow
structure of a dam

spinning reserve

Unused capacity available from units connected to and synchronized with
the grid to serve additional demand. The spinning reserve must be under
automatic control to instantly respond to system requirements.

spot market

A market where goods are traded for immediate delivery.

SPR

Strategic Petroleum Reserve in the US.

spread

The difference between two prices, either across time or between commodities
or instruments.

spread (options)

An option trade in which two or more open positions are established in
order to trade the differentials and offset risk. Option spreads may use
different strike prices and/or expiry dates.

Spread-trading

Buying one instrument/commodity and selling another, with a view to profiting
from the change in the gap between the two markets.

steam cracker

Ethylene plant. A petrochemical plant which produces olefins, particularly
ethylene, and, in some cases, aromatics.

steam generation
plant

A thermal electricity generating plant which creates steam to drive a
turbine.

stochastics

The theory of stochastics is based on the premise that prices close nearer
the high in an uptrend, and nearer the low in a downtrend. %D Slow %D
%K %R are all just names for different ways of smoothing the stochastic
measures derived from the uptrend/downtrend theory.

storage

In oil: typically onland tankage facilities for short- or long-term storage
of crude or products; sometimes used in economic parlance interchangeably
with the concept of oil stocks.

In natural gas: facilities used to store natural gas which has been transferred
from its original location. Usually consists of natural geological reservoirs
like depleted oil or gas fields, water-bearing sands sealed on top by
an impermeable cap rock, underground salt domes, bedded salt formations,
or in rate cases, abandoned mines.

straight run

Material which has come straight from an atmospheric distillation unit
and has not been cracked or reformed, and which is usually used as a feedstock
or as a utility fuel.

stranded investment/stranded
costs

An investment with a cost recovery schedule that was initially approved
by regulatory action that subsequent regulatory action or market forces
has rendered not practically recoverable. Costs that utilities are currently
permitted to recover through their rates but whose recovery may be impeded
or prevented by the advent of competition in the industry.

strike price

The price at which an option holder has the right to buy or sell an underlying
commodity/derivative.

substation

Facility equipment that switches, changes, or regulates electric voltage.
An electric power station which serves as a control and transfer of power
flow, transform voltage levels, and serve as delivery points to industrial
customers.

superconductivity

The flow of electric current without resistance in certain metals and
alloys at temperatures near absolute zero. Perpetual motion on an atomic
scale; the conduction of electricity without the slightest power loss;
perfect conductivity.

superconductor

A material that becomes a perfect conductor of electricity when chilled.
Developments beginning in 1986 have raised the threshold temperature to
levels which, in the near future, may provide wires capable of conducting
large electric currents without line loss.

support

A price at which buyers are likely to start buying in a downtrend.

surplus energy

Energy generating capability that is beyond the immediate needs of the
producing system. This energy may be sold on an interruptible basis or
as firm power.

susp

Suspension grade PVC.

switching station/switch
yard

Facility used to tie together two or more electric circuits through switches.
The switches are selectively arranged to permit a circuit to be disconnected,
or to change the electric connection between the circuits

synthetic natural
gas

Energy-rich vapors manufactured from coal.

system lambda

The marginal, variable production cost of electricity at a given level
of system output.

system operator

A person or entity who operates the electric system .

t/a

Abbreviation for Turnaround.

t/c

Tanker market abbreviation for timecharter.

tailings

Material rejected from a mill after most of the recoverable valuable
minerals have been extracted. Confined in a tailings pond, the
main function of which is to allow enough time for heavy metals to settle
out or for cyanide to be destroyed before water is discharged into the
receiving watershed.

take-or-pay

A clause in a gas supply contract which provides that a minimum quantity
of gas be paid for, whether or not delivery is accepted by the purchaser.
Most contracts contain a time period in which the buyer may take later
delivery of gas without penalty. Not generally included in contracts written
today. Some buyers will pay the seller a fee (often large) to buy out
the contract (usually an old contract), so they are not required to take
the gas. Often abbreviated to TOP by companies, but should be written
in full.

tankers

Size is typically measured in deadweight tonnes (cargo capacity for carrying
water).

Here are tanker sizes and typical abbreviations (in deadweight tonnes)

GP General Purpose 16,500 - 24,999

MR Medium Range 25,000 - 44,999

LR1 Large/Long Range 45,000 - 79,999

LR2 Large/Long Range 80,000 - 159,999

VLCC Very Large Crude Carrier 160,000 - 319,999

ULCC Ultra Large Crude Carrier 320,000 - 549,000

Also:

Handysize 35,000

Panamax 65,000

Aframax 80,000

Suezmax (Million barrel) 130,000

Capesize: Any vessel, usually carrying dry bulk cargoes, that is too
big to navigate the Panama or Suez Canals.

tariff

Rates an regulated entity will charge to provide service to its customers
as well as the terms and conditions that it will follow in providing service.

TDP

Toluene disproportionation. Another process to produce benzene (and xylenes)
from toluene.

tech grd

Technical grade (also known as anti-freeze grade) monoethylene glycol.

terawatt hours (twh)

one thousand Gigawatt hours.

TET

Texas Eastern Transmission pipeline.

therm

A unit of heating value equal to 100,000 Btus, in
common use in the UK. Roughly, you can get 56 therms by setting fire to
a barrel of crude oil. The dekatherm, 10 therms, is a more commonly used unit in the
US.

thermal generation

The production of electricity from plants that convert heat energy into
electrical energy. The heat in thermal plants can be produced from a number
of sources such as coal, oil, gas or nuclear fuel

thorium

An element with atomic number 90. It may be used as a fertile material
in a nuclear reactor as the irradiation of thorium-232 with neutrons produces
uranium-233, an artificial fissile material like plutonium-239.

throughput

The volume of gas flowing through a pipeline, ore processed by a concentrator
etc.

tiered rates

A rate design which divides customer use into different tiers, or blocks,
with different prices charged for each.

time value

The time component in a premium for an option art. Typically the time
value of an option declines as it moves closer to expiry.

timecharter

The chartering of a tanker or other freight vessel for a period of time
rather than for a specific voyage.

tolling arrangement

An arrangement whereby a party moves fuel to a power generator and receives
kilowatt hours (kWh) in return for a pre-established fee.

tolling fee

A fee paid for use of electric generation assets used to convert fuel
to power.

tonne

The standard Platts abbreviation is mt.

A tonne, or metric ton, sometimes tautologically referred to as a metric
tonne, is defined as the weight of one cubic meter of water. Rough-and-ready
barrel-tonne conversion factor is 7.33 barrels of crude to one tonne,
but obviously depends on the specific gravity of the crude.

transformer

An electrical device for changing the voltage of alternating current.

transmission

The network of high voltage lines, transformers and switches used to
move electricity from generators to the distribution system. Also used
to interconnect different utility systems and independent power producers
together into a synchronized network. Transmission is considered to end
when the energy is transformed for distribution to the consumer.

transmission loss

The power lost in transmission between one point and another. It is measured
as the difference between the net power passing the first point and the
net power passing the second point .

transmission
voltage

Voltage levels utilized for bulk transmission systems: generally 69 KV
- 750 KV AC or DC.

treatment/refining
charges

The fee paid by a miner to the smelter/refiner which upgrades the mine’s
concentrate output. Abbreviated to TC/RCs on second reference. Smelting/refining
contracts also typically include escalators, which adjust the charges
up or down in line with fluctuations in the market price of the metal
in question. See also Custom smelter.

trend

“The trend is your friend.” A trend at its most basic consists
of a situation in which prices move more in one direction than another.
Many technical measures attempt to discern when a price is moving in a
trend, punctuated by minor corrections, and when it is simply trendless.

trend lines

Lines drawn on a price chart linking subsequent lows in a downtrend and
subsequent highs in a uptrend.

triangle

Chart pattern. Prices trade sideways after a main trend, and the range
gets smaller each day.

triple bottom

A bullish reversal pattern characterized by three highs at roughly equal
value.

triple top

A bearish reversal pattern characterized by three highs at roughly equal
value.

turbine

The part of a generating unit usually consisting of a series of curved
vanes or blades on a central spindle, which is spun by the force of water,
steam or hot gas to drive an electricity generator.

turnaround

A refinery or petrochemical plant is said to be “in turnaround”
when it is taken out of service of maintenance, usually planned.

TVA

Temporary voluntary abatement. The producer/seller agrees to suspend
a nominated price increase. Often used in the US petrochemicals market.

TVA (2)

Tennessee Valley Authority.

two-part rate

A charge for electricity consisting of a demand (kW) component and an
energy or commodity (kWh) component.

UKC

UK-Continent. Tanker market term for the UK and northwest European region
closest to it.

ULCC

Ultra large crude carrier; with a capacity of 320,000-600,000 dwt. See tankers.

Unconventional
gas

Natural gas that cannot be produced using current technologies.

uncovered position
(futures)

Where a long market player has bought more of a commodity than he has
agreed to sell, or where a short market player has sold more of a commodity
than (s)he has to deliver.

uncovered position
(options)

When the grantor of an options position has no cover in the underlying
futures market against a price swing in the holder’s favor (see delta
hedging).

UNL

Abbreviation for unleaded.

uptrend

A price pattern characterized by subsequent rising highs and rising lows.

uranium

The heaviest naturally occurring element (atomic number 92). It is metallic
and slightly radioactive. Its only substantial use today is as a raw material
for generating electricity via nuclear fission. Ranging in atomic mass
from 227 to 240, uranium has 14 isotopes, of which only three occur naturally:
uranium-238, uranium-235, and uranium-234.

Uranium-238 – comprises 99.283% by weight of natural uranium
(ie uranium whose isotopic composition, as it occurs in nature, has not
been altered)and is not fissile, but is fertile. It usually absorbs any
neutrons which strike it and as a result is transformed into plutonium-239,
a fissile isotope of plutonium.

Uranium-235 – the only naturally occurring isotope of uranium
which is capable of fission. Natural uranium contains approximately 0.711%
by weight of uranium-235.

Uranium-234 – exists in very small quantities in natural
uranium (0.005% by weight) and is not fissile in thermal reactors.

The remaining isotopes are created synthetically. Uranium-233 is fissile
and is obtained by the irradiation of thorium-232 with neutrons. Uranium-232,
-236, and –237 are found in irradiated nuclear fuel and are not fissile.

USAC

Tanker abbreviation for US Atlantic Coast.

USEC

Petrochemical markets abbreviation for US East Coast.

USG

Tanker and market abbreviation for United States Gulf, more properly
known as the Gulf of Mexico.

USWC

Tanker and market abbreviation for US West Coast.

vanadium

Metal present in some fuels. Vanadium content is one specification
for measuring cargo quality. Vanadium is traded in two forms – vanadium
pentoxide (V2O5), and ferrovanadium.

var

Voltage-Ampere-Reactive. A measure of reactive power.

variable costs

The total costs incurred to produce energy, excluding fixed costs which
are incurred regardless of whether the resource is operating. Variable
costs usually include fuel, increased maintenance and additional labor.

variation margin

Profits and losses on open positions which are calculated daily by the
mark-to-market process, which are then paid or collected daily.

VGO

Vacuum gasoil, also known as catfeed. Feedstock for fluid catalytic
crackers used to make gasoline, gasoil and other by-products.

viscosity

Measure of a liquid’s resistance to flow. There are a number of viscosity
scales in current use.

VLCC

Very large crude carrier; with a capacity of 200,000-320,000 dwt. See tankers.

volatility
(Chaikin’s)

Calculate the exponential moving average of the difference between the
daily high and low, lets call this ‘range’. Volatility = range now minus
range n days ago / range n day’s ago.

volatility
(historical volatility)

The degree to which a particular price has fluctuated in the past.

volatility (options)

A value attributed to an underlying futures contract which determines
the premium that is set by the grantor. Includes an element of historical
volatility, and the volatility which the grantor of an option believes
will still be seen in that futures contract.

volt

The unit of measurement of electromotive force. It is equivalent to the
force required to produce a current of one ampere through a resistance
of one ohm. The unit of measure for electrical potential. Generally measured
in kilovolts or kV. Typical transmission level voltages are 115 kV, 230
kV and 500 kV.

voltage control

The control of transmission voltage adjustments in generator reactive
output and transformer taps, and by switching capacitors and inductors
on the transmission and distribution systems.

voltage reduction

Any intentional reduction of system voltage by 3 percent or greater for
reasons of maintaining the continuity of service of the bulk electric
power supply system.

watt

A measure of real power production or usage equal to one Joule per second.
The rate of energy transfer equivalent to 1 ampere flowing under a pressure
of 1 volt.

watt hour (wh)

An electrical energy unit of measure equal to 1 watt of power supplied
to, or taken from, an electric circuit steadily for 1 hour.

weighted moving average

The average of prices over a certain period, but weighted to give more
importance to the latest price. So, if it were a 5-day MA, the latest
price might be weighted by a factor of 5, yesterday’s by a factor of 4,
the day before by 3 times, the day before twice, and before that, the
simple price. Different weighting systems can be used.

wet gas

Natural gas containing liquefiable hydrocarbons. Natural gasoline, butane,
pentane and other light hydrocarbons can be removed by chailling and pressure
or extraction. It also refers to gas that has water in excess of 7lb/mil
cu ft (MMcf).

wheeling

In the gas business, refers to the transfer of gas between pipelines.
In the power business, refers to the transfer of electrons across transmission
grids.

wheeling service

The movement of electricity from one system to another over transmission
facilities of intervening systems. Wheeling service contracts can be established
between two or more systems.

wholesale wheeling

The transmission of electricity from a wholesale supplier to another
wholesale supplier by a third party

working gas

Volume of gas that is expected to be cycled from a natural gas storage
facility.

WTI

West Texas Intermediate crude oil. WTI crude is deemed to be traded at
Cushing, Oklahoma. Traders typically refer to the NYMEX Light Sweet Crude futures contract as the WTI contract, although the contract
allows delivery of other grades.

WTS

West Texas Sour crude oil.

Zeebrugge

Belgian port. The terminus point of The (European) Interconnector, a
gas line linking to the UK to continental Europe, and thus a major European
gas delivery hub.

E2ENERGY

GLOSSARY

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

Z

15-Day Brent

A/F

abandon

accumulation

AG

AGO

alkylate

alternating current (AC)

alternating current distribution

American style option

ampere (amp)

ancillary services

Andrew’s Pitchfork

Aniline point

anode

ANS

anthracite

API

API gravity

APT

ARA

Arab Gulf

Aramco

arbitrage

aromatics

asph

asphalt

assay

assessment

associated gas

at-the-money

AUD

availability factor

available but not needed capacity

avails

average cost pricing

avgas

avoided cost

B/L

backwardation

balancing

barge

barrel

base gas

base load

base load capacity

base load plant

base metal

BBQ

Bcf

bearish

bid

bid price

bill of lading

alternating
current (AC)

alternating
current distribution

availability
factor

available but not needed
capacity

British thermal unit
(btu)

capacity
relinquishment

combined heat and power
plant

Commodity Channel
Index

compressed natural
gas