Other glossaries: Derivatives Glossary - Technicals Glossary

The Platts industry glossary is continuously updated. Please email webeditor@platts.com to 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. 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 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 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 bio-leaching biomass conversion bituminous coal black start blackout blendstock blister copper blowmolding Bollinger bands BPA breakout Brent blend British thermal unit (btu) brownout BS&W Btu BTX BTX extraction bullish bunker C burner-tip burnup busbar busbar cost butadiene C C+F C4s call option candlesticks capacitor capacity capacity (purchased) capacity charge capacity margin capacity release capacity relinquishment caribs cash and carry cash market cash settlement cat cracker cat gasoline catfeed cathode centistoke cetane cetane number CFD CFPP channel chemical grade China main port CIF circuit city-gate clearing clearing fee close out cloud point CME CMP CNG CNR COA cofiring cogeneration combined cycle combined heat and power plant Commodity Channel Index compressed natural gas compressor station concentrates condensate conductor congestion connection consolidation contango Conti Index contract contract for differences contract price coolant CP crack spread cracked cracked fuel cracking cubic feet per second currencies current curtailable rate cushion gas custom smelter cycles cycling D DAF dated Brent decay product declining block rate degree day dehydro-genation dekatherm deliverability delta hedging delta neutral demand demand side management (dsm) demurrage depleted uranium DER DERD design day diesel index Differential direct current (dc) dirty power discount displacement distribution distribution (2) domestic/retail competition dore bar double bottom double top Dow theory downtrend dry gas DWT E E-4 economy energy EFP EIS electrolytic refining Elliott Wave embedded cost enabling agreement energy charge enriched uranium environmental impact study exercise exit fee expiry (options) exponentially-smoothed moving average F farm-out FAS fast breeder reactor fast reactor FCA FCC FCC (2) FD feedstock feedstock gas FERC FERC order 636 fertile material Fibonacci final disposal FIP firm energy firm gas firm power first core fissile material fission fixed charge flag flash point flask flexibility mechanism flue gas desulfurization unit (scrubber) FOB FOD force majeure forced outage rate Forties Free Carrier Free on Board FT fuel assembly fuel cell fuel fabrication fuel switching full-forced outage fusion futures contract G g/l gal gallon Gann theory gas bubble gas-gathering gasoil gasoline generation generator geothermal gigajoule (GJ) gigawatt gigawatt hour (gwh) gigawatt-hour GOB gold loans GOM or GM g-p grid Grosskrotzenburg Group 3 H HDA head and shoulders heap leaching heavy crude oil heavy metals heavy water hedge Henry Hub highly enriched uranium HIPS HLS HO Hormuz HSFO hub hydroelectric plant I impedance initial margin inj in-lieu energy interconnection Interconnector, (the European) intermediate load interruptible demand interruptible gas in-the-money intrinsic value inverse head and shoulders IPE IPP irradiated fuel isomer isomerate isomerization isotopes IT ITT J joint venture joules K kero kilowatt kilowatt (kw) kilowatt year (kw-y) kilowatt-hour kt L lambda landed cost Laufenburg laycan lb lending LIBOR lifting light crude oil light ends lignite liquefied natural gas liter LLS LME LNG load load curve load factor load management load shape loaning long long-run marginal costs loop flow loss of load probability (lolp) LPG LR LSFO LSWR LVN M MACD (moving average convergence divergence) marginal cost pricing marginal price of energy market-area storage, or hub mark-to-market mcf Med megawatt (mw) megawatt-hour (mwh) mmbtu mmcf MMS moderator mogas momentum MON MOPAG MOPS mothball moving average moving average crossover moving average envelopes MR MR (2) mt MTBE municipal utility N N&A nameplate capacity naphtha naphthenic naphthenic naphtha National Balancing Point National Energy Board natural gas natural gas natural gas measurements net capability net generation net smelter return network NGL nuclear fuel nuclear fuel nuclear power plant nuclear reactor nuclear waste NWE NYH NYMEX O o/r octane number offer off-peak offset Ofgem ohm olefins On Balance Volume OPEC open interest open interest open outcry open pit operating reserve margin optimization oscillator out-the-money out-turn oxygenate oxygenated gasoline P P&C P/C PADD paraffinic paraffinic naphtha parking peak demand peak load peak load plant peaking capacity pennants PEP index petrochemicals PFG physical delivery pl plutonium point-and-figure polymers pooling point postage stamp rate posted price pour point ppm PPT prem premium price cap primary/secondary prime mover prompt PRT pumped-storage hydroelectric plant put option puts/calls ratio pygas Q Qua Ibo quota R R+M/2 rack price radioactive decay raffinate-1, raffinate-2 rally random walk Rate of Change of Prices reactor types REC re-enrichment ref refinery reformate reg reg unl regassification point Relative Strength Index renewable source reserve capacity Reserves reservoir resids resistance retail competition retracement reverse tolling RFG RNR roll over RON run-of-river plant RVP S s/d salting secondary market settlement price short SIMEX smelter solar generation solvent extraction-electrowinning sour/sweet crude sour/sweet gas spark spread spill spinning reserve spot market SPR spread spread (options) Spread-trading steam cracker steam generation plant stochastics storage straight run stranded investment/stranded costs strike price substation superconductivity superconductor support surplus energy susp switching station/switch yard synthetic natural gas system lambda system operator T t/a t/c tailings take-or-pay tankers tariff TDP tech grd terawatt hours (twh) TET therm thermal generation thorium throughput tiered rates time value timecharter tolling arrangement tolling fee tonne transformer transmission transmission loss transmission voltage treatment/refining charges trend trend lines triangle triple bottom triple top turbine turnaround TVA TVA (2) two-part rate U UKC ULCC Unconventional gas uncovered position (futures) uncovered position (options) UNL uptrend uranium USAC USEC USG USWC V vanadium var variable costs variation margin VGO viscosity VLCC volatility (Chaikin's) volatility (historical volatility) volatility (options) volt voltage control voltage reduction W watt watt hour (wh) weighted moving average wet gas wheeling wheeling service wholesale wheeling working gas WTI WTS Z Zeebrugge 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 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. 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