5-Day Newsletter Average - An average that appears in the OPIS weekly newsletter that includes closing averages for the prior Friday, Monday, Tuesday, Wednesday, and Thursday (except on certain holiday weeks). 5-day newsletter averages are ALWAYS gross.

6 to 6 - Refers to the time frame that prices are effective for certain suppliers, from 6:00 p.m to 6:00 p.m the following day. This time for price changes differs from the standard 12:00 a.m. to 12:00 a.m. time change that most suppliers had used until the beginning of 2002. Prices are available to OPIS subscribers once the change is confirmed and shortly after the price change becomes effective, based upon local terminal times.

Abandonment Rule (Order490) - A FERC rule that allows producers and their pipeline purchasers with pre-granted "blanket" authority to abandon sales when the contract has expired or has been mutually renegotiated. It also allows the abandonment of an expired or renegotiated contract between one pipeline and another.

Account Executive - An agent or broker representing a commission house, who generally takes and manages commodities futures and options orders, and often offers advice to trading clients.

Ad Valorem Tax - A charge levied on persons or organizations based on the value of transaction. It is normally a given percentage of the price at the retail or manufacturing stage and is a common form of sales tax; e.g. federal excise tax on new trucks and trailers.

ADP (Alternate Delivery Procedures) - A provision of many energy futures contracts that allows for both sides of the futures market to make deliveries under terms and conditions which differ markedly from those described by the strict delivery rules. ADP's always occur following the expiration of contracts for the spot month, after deliveries have been matched.

Affiliated Marketer - A marketing company that buys and resells gas and is owned either by an interstate pipeline, a local distribution company or a corporation that also owns either an interstate pipeline subsidiary or a local distribution company.

AGA (American Gas Association) - An industry trade group representing natural gas utility companies.

Alcohol and Alcohol Blends - Family name of a group of organic chemical compounds composed of carbon, hydrogen and oxygen. Examples are methanol, ethanol and tertiary butyl alcohol. Alcohol and alcohol blends are added to gasoline in order to make it burn cleaner.

Alkylate - (Alkylation) A refining operation that takes low value derivatives from the cat cracking and other processes and unites them in the presence of an acid catalyst to produce a very high octane, low vapor pressure gasoline blending component.

Alkylation Unit - An oil refining unit in which propylene or butylene reacts with iso-butylene to yield a high octane gasoline blending component called alkylate. Alkylate helps improve the environmental qualities of gasoline – low vapor pressure, zero sulfur content, zero oelfin content, zero benzene and a high octane number.

Allocation Method - The method of allocating volumes to affected parties for a variety of reasons.

Allowance for Funds Used During Construction (AFUDC) - A component of construction costs representing the net cost of borrowed funds and a reasonable rate on other funds used during the period of construction. AFUDC is capitalized until the project is placed in operation by concurrent credits to the income statement and charges to utility plant, based generally on the amount expended to date on the particular project. Effective January 1, 1977, FERC amended the Uniform System of Accounts establishing formulas for maximum allowable AFUDC rates.

Allowed Rate of Return - The rate of return that a regulatory commission allows on a rate base in establishing just and reasonable rates for a utility. It is usually based on the composite cost of financing rate base from debt, preferred stock, and common equity.

Annual Quantity Entitlement (AQE) - The quantity of gas a Buyer or Shipper has nominated to receive on an annual basis from a pipeline.

Any Current Month - OPIS prices labeled as "any current month" represent transactions for product that buyer and seller agree will be delivered at any time during the current calendar month.

Any Delivery (Any) - Spot market terminology for deliveries that can be made at any time during the month at the seller's discretion. Spot market prices will often be tied to the delivery stipulations termed Prompt, Out, or Any.

(ANSI) American National Standards Institute - The coordinating organization for America's federated national standards system. The ANSI federation consists of nine hundred companies, large and small, and some two hundred trade, technical, professional, labor, and consumer organizations.

API (American Petroleum Institute) - A trade association comprised of larger, integrated oil companies that works for the common goals of the oil industry.

API Gravity - Industry scale expressing the gravity or density of liquid petroleum products. The measuring scale is calibrated in terms of degrees API; it may be calculated in terms of the following formula: Degrees API = 141.5/sp.gr.60° F/60 °F -131.5 The higher the API gravity, the lighter the compound. Light crudes generally exceed 38 degrees API and heavy crudes are commonly labeled as all crudes with an API gravity of 22 degrees or below. Intermediate crudes fall in the range of 22 degrees to 38 degrees API gravity.

API Inventory Figures - The most widely watched body of data in the petroleum industry. This report compiles changes in domestic petroleum production, imports, refining, capacity and product movements into and out of primary storage. Traders use this information to access supply and demand on a week-to-week basis. These figures are usually released Tuesday afternoons. The release of these reports are often a catalyst for movement on the futures market.

ARAMCO (Arabian American Oil Company) - A joint venture between Saudi Arabia and four American oil companies (Exxon, Mobil, Texaco and Chevron) formed to market Saudi Arabian crude production.

Arbitrage - The buying, selling, and exchange of petroleum products or crude oil in different markets with the express design to take advantage of location, product, and timing differentials. Traders looking to move U.S. Gulf Coast No. 2 oil to Rotterdam watch the arbitrage between Gulf Coast prices and the IPE, for example.

Aromatics - Hydrocarbons characterized by their uniform carbon ring structure and their often pleasant aroma. Commercial petroleum aromatics are benzene, toluene, and xylene. These three are often referred to by the acronym BTX. These chemicals are used as high octane components in gasoline. Aromatics have been judged to be undesirable in some finished motor fuels with various state and federal regulations geared toward reducing their levels. CARB diesel fuel in the state of California mandates a low aromatics composition.

As Billed Rates - A policy requiring pipelines to flow through gas costs to their customers in the same manner as they are billed to the pipeline.

Asphalt - A dark-brown-to-black cement-like material containing bitumens as the predominant constituent obtained by petroleum processing; used primarily for road construction. It includes crude asphalt as well as the following finished products: cements, fluxes, the asphalt content of emulsions (exclusive of water), and petroleum distillates blended with asphalt to make cutback asphalts. Note: The conversion factor for asphalt is 5.5 barrels per short ton.

ASTM (American Society of Testing Materials) - Grade and quality specifications for petroleum products are determined by ASTM test methods.

Atmospheric Crude Oil Distillation - The refining process of separating crude oil components at atmospheric pressure by heating to temperatures of about 600 degrees Fahrenheit to 750 degrees Fahrenheit (depending on the nature of the crude oil and desired products) and subsequent condensing of the fractions by cooling.

At the Market Order - Specifies buying or selling a futures/options contract as quickly as possible, at the best possible price. Gives the broker the discretion to use his expertise to execute the contract, regardless of where the market moves, between when the order is given and execution is made.

At the Money Option - Refers to the state which may briefly exist when the options strike price and the futures price intersect. A 60cts gal December call or put is "at the money" when the futures price is at 60cts gal.

Aviation Gasoline (Finished) - A complex mixture of relatively volatile hydrocarbons with or without small quantities of additives, blended to form a fuel suitable for use in aviation reciprocating engines. Fuel specifications are provided in ASTM Specification D 910 and Military Specification MIL-G-5572. Note: Data on blending components are not counted in data on finished aviation gasoline.

Aviation Gasoline Blending Components - Naphthas which will be used for blending or compounding into finished aviation gasoline (e.g., straight-run gasoline, alkylate, reformate, benzene, toluene, and xylenes). Excludes oxygenates (alcohols, ethers), butanes, and pentanes.. Oxygenates are reported as other hydrocarbons, hydrogen, and oxygenates.

Automated Meter Reading (AMR) - "Real time" monitoring of natural gas quantities and characteristics as it passes through a specific location. This is usually accomplished through the use of radio or telephone technologies.

Backhaul - A transaction that results in the transportation of gas in a direction opposite of the aggregate physical flow of gas in the pipeline. This is typically achieved when the transporting pipeline redelivers gas at a point(s) upstream from the point(s) of receipt. A back haul condition will exist as long as the aggregate backhaul transactions total less than the aggregate forward haul transactions. A back haul transaction can result in a delivery by non-delivery or cut back (reduction) of physical flow at a delivery point.

Backwardation - Term that describes a market which features higher prices for prompt delivery than for forward material. Also referred to as an inverted market, this scenario offers no return for storage.

Balancing - The act of making receipts and deliveries of gas into or withdrawals from either an interstate gas pipeline or a local distribution company's distribution system equal. Balancing may be accomplished daily, monthly or seasonally, with fees or penalties generally assessed for excessive imbalances. The purpose of balancing requirements is to prevent a shipper from tying up storage and line pack with excess deliveries of transportation gas, or from depleting storage and line pack by taking more gas off the system than it delivers, both of which disrupt other sales and transportation services.

Balancing Agreement - A contractual agreement between two or more legal entities to account for differences between chart measured quantities and the total confirmed nominated quantities at a point. They have been used to keep track of over/under production relative to entitlements between producers; over/under deliveries relative to confirmed nominations between operators of wells, pipelines and LDCs.

Balancing Tolerance - The amount of imbalance allowed by a utility which is not subject to a penalty charge. The imbalance tolerance is usually stated in a range expressed in percentage terms.

Barrel - Used as the standard measurement of volume for crude oil and large quantities of refined products in the petroleum industry. A unit of volume equal to 42 U.S. gallons - often abbreviated as bbl.

Barrels Per Calendar Day - The amount of input that a distillation facility can process under usual operating conditions. The amount is expressed in terms of capacity during a 24-hour period and reduces the maximum processing capability of all units at the facility under continuous operation (see Barrels per Stream Day) to account for the following limitations that may delay, interrupt, or slow down production:
• the capability of downstream facilities to absorb the output of crude oil processing facilities of a given refinery. No reduction is made when a planned distribution of intermediate streams through other than downstream facilities is part of a refinery’s normal operation; the types and grades of inputs to be processed;
• the types and grades of products expected to be manufactured; the environmental constraints associated with refinery operations; the reduction of capacity for scheduled downtime due to such conditions as routine inspection, maintenance, repairs, and turnaround; and
• the reduction of capacity for unscheduled downtime due to such conditions as mechanical problems, repairs, and slowdowns.

Barrels Per Stream Day - The maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal crude and product slate conditions with no allowance for downtime.

Base Gas - Gas in a storage reservoir which provides the pressure necessary for designed withdrawals of working gas. Also called cushion gas.

Base Load - Market requirements that remain fairly constant over a period of time that usually are not temperature sensitive.

Basis - The difference between the price of the actual commodity (e.g. heating oil) and the price of the futures contract. Basis can be calculated by subtracting the futures price from the cash price. For example, if N.Y. Harbor physical heating oil is 60cts gal and the futures price is 61cts gal, the basis is -1.00cts gal.

Basis Risk - Price exposure associated with variation in the relationship between a physical or cash price and the appropriate NYMEX reference. These risks may be associated with location, product specifications, and time variations.

Batch - A shipment of one type of product through a pipeline.

Bear Market (Bearish) - A market in which prices are declining.

Benchmark Crude - A widely accepted grade of crude oil used as a standard in trading. Other grades would be traded at a price differential according to the quality differences. Examples would be WTI, Brent, Dubai and Arab Light.

Benzene (C6H6) - An aromatic hydrocarbon present in small proportion in some crude oils and made commercially from petroleum by the catalytic reforming of naphthenes in petroleum naphtha. Also made from coal in the manufacture of coke. Used as a solvent, in manufacturing detergents, synthetic fibers, and petrochemicals and as a component of high-octane gasoline.

Bid and Ask - Prices offered to buy and sell respectively, on spot market deals. An interested party can sell at the bid and buy at the asked price. Spot prices are not reported as a straight number, but rather, in terms of bid and ask. OPIS editors derive an appropriate price from those to report a value that's representative of that market.

Blanket Certificate - Certificate issued by FERC which authorizes open access transportation by interstate pipeline companies on behalf of others and certain services by local distribution companies and Hinshaw companies under blanket certificates (of public convenience and necessity) subject to certain conditions and reporting requirements.

Blending Plant - A facility which has no refining capability but is either capable of producing finished motor gasoline through mechanical blending or blends oxygenates with motor gasoline.

Boiler - A closed vessel in which a liquid is heated and/or vaporized. Often classified as to steam or hot water, low pressure or high pressure, capable of burning one fuel or a number of fuels.

Boiler Efficiency - The ratio of the useful heat output to the heat input multiplied by 100 and expressed as a percent.

Boiler Rating - The rating of a steam boiler expressed as the total heat transferred by the heating surfaces in Btu per hour. Sometimes also expressed in horsepower or pounds of steam per hour.

Bonded Petroleum Imports - Petroleum imported and entered into Customs bonded storage. These imports are not included in the import statistics until they are: (1) withdrawn from storage free of duty for use as fuel for vessels and aircraft engaged in international trade; or (2) withdrawn from storage with duty paid for domestic use.

Bottoms - The heaviest components of petroleum product left in the refining process after the light ends have been removed. These products include asphalt, coke and residuals.

Branded - Distinction of product that is sold under a trademark owned by a refiner (or reseller in some instances) and usually affiliated with integrated or major oil firms. Branded product often carries a premium to unbranded product, since it can be sold under a branded “flag.” Branded gasoline can be sold as unbranded product, but the reverse is not true.

Branded Average -An average of all branded suppliers, denoted with a (b) in the display. Calculated for gross or net.

Break - A rapid and sharp price decline.

Brent - Blend of crude oil from a critical group of North Sea fields, Brent is the standard contract for IPE crude oil futures trading, and the most commonly referenced crude in Europe. It's described as the European counterpart of WTI, and its morning performance is often a harbinger for the NYMEX opening.

British Thermal Unit (BTU) - The measure used to gauge the heating quality of various fuels. It is the amount of heat needed to increase the temperature of one pound of water one degree Fahrenheit from 58.5 to 59.5 degrees under standard pressure of 30 inches of mercury at or near its point of maximum density. General conversion factors are: 1 BTU = 252 calories,1,055 joules, or 0.293 watt hours.

Broker - Anyone who executes futures or options contracts in exchange for a commission fee. The term can apply to account executives who take phone orders and pass the execution on to the floor; the term also applies to floor brokers on the NYMEX who actually execute the orders in the pit.

BTU, Dry - The heating value contained in a cubic foot of natural gas measured and calculated free of moisture content. Contractually, dry may be defined as less than or equal to 7 pounds of water per Mcf.

BTU, Saturated (or Wet) - The number of Btus contained in a cubic foot of natural gas fully saturated with water under actual delivery pressure, temperature and gravity conditions.

BTX - The acronym for the commercial petroleum aromatics benzene, toluene, and xylenes. See individual categories for definitions.

Bulk Station - A facility used in the storage or marketing of petroleum products which has a total bulk storage of less than 50,000 barrels and receives product by tank car, or truck.

Bulk Terminal - A facility used primarily for the storage and/or marketing of petroleum products which has a total bulk storage capacity of 50,000 bbls or more and/or receives petroleum products by tanker, barge or pipeline.

Bull Market (Bullish) - A market where prices are rising.

Bunker Fuel - A heavier distillate used in a shop's boilers.

Butane (C4H10) - A normally gaseous straight-chain or branch-chain hydrocarbon extracted from natural gas or refinery gas streams. It includes normal butane and refinery-grade butane and is designated in ASTM Specification D1835 and Gas Processors Association Specifications for commercial butane.

Butylenes (C4H8) - An olefinic hydrocarbon recovered from refinery processes.

Buy-out Costs (buy-down costs) - Payments made by pipelines to producers to extinguish (buy-out) outstanding take-or-pay liabilities under existing contracts, or to reform (buy-down) the contracts.

Buyer's Right of First Refusal - In negotiating situations where the seller of gas has the right to solicit third-party bids for his gas, a right of first refusal provision gives the buyer of the gas the option of meeting the third party bid price and continuing the contract on such terms.

By-pass - An auxiliary piping arrangement, generally to carry gas around specific equipment or an integral section of a piping system. A by-pass is usually installed to permit passage through the line while adjustments or repairs are made on the section which is by-passed. Also used to describe the circumvention of a local distribution company's distribution system to supply gas to a specific Customer.

C-store - Literally, short for convenience store, but also applying to retail gasoline outlets which sell convenience goods such as milk, cigarettes, soft drinks and bread.

Call Option - Also referred to simply as a "call." Refers to an option which gives the buyer the right, but not the obligation, to buy a futures contract at a specific strike price.

Cap - Risk management program which, usually in exchange for an up front premium, offers a price ceiling for various size purchases of fuel. Caps are most commonly offered from suppliers who utilize petroleum futures options.

Captive Refinery Oxygenate Plants - Oxygenate production facilities located within or adjacent to a refinery complex.

CARB Diesel - Term which refers to the diesel standard mandated for sale by the California Air Resources Board. It includes tough standards for sulfur and for very low aromatics.

Carload - Shipment of freight required to fill a rail car.

Carrying Charge - The aggregate cost of storing a particular commodity, including, but not limited to, storage fees, cost of money, insurance, etc. Heating oil futures contracts often reflect carrying charges in the fall, leading forward months to trade at a premium to near-term positions.

• Fresh Feeds: Crude oil or petroleum distillates which are being fed to processing units for the first time.
• Recycled Feeds: Feeds that are continuously fed back for additional processing.

Cash Market (Also Spot Market) - High volume (25,000 to 300,000 bbls) contractual agreements between oil companies dictating delivery of petroleum products or crude oil in the near future for an established sales price. Since this market reacts quickly, and is an alternative to wholesale sales, it provides a good indication of the direction of wholesale price trends.

Catalytic Cracking - The refining process of breaking via heat and pressure down the larger, heavier and more complex hydrocarbon molecules into simpler and lighter molecules, primarily gasoline. Catalytic cracking is accomplished by the use of a catalytic agent and is an effective process for increasing the yield of gasoline from crude oil.

Catalytic Hydrocracking - A refining process that uses hydrogen and catalysts with relatively low temperatures and high pressures for converting middle boiling or residual material to high-octane gasoline, reformer charge stock, jet fuel, and/or high grade fuel oil. The process uses one or more catalysts, depending upon product output, and can handle high sulfur feedstocks without prior desulfurization.

Catalytic Hydrotreating - A refining process for treating petroleum fractions from atmospheric or vacuum distillation units (e.g., naphthas, middle distillates, reformer feeds, residual fuel oil, and heavy gas oil) and other petroleum (e.g., cat cracked naphtha, coker naphtha, gas oil, etc.) in the presence of catalysts and substantial quantities of hydrogen. Hydrotreating includes desulfurization, removal of substances (e.g., nitrogen compounds) that deactivate catalysts, conversion of olefins to paraffins to reduce gum formation in gasoline, and other processes to upgrade the quality of the fractions.

Catalytic Reforming - A refining process using controlled heat and pressure with catalysts to rearrange certain hydrocarbon molecules, thereby converting paraffinic and naphthenic type hydrocarbons (e.g., low-octane gasoline boiling range fractions) into petrochemical feedstocks and higher octane stocks suitable for blending into finished gasoline. Catalytic reforming is reported in two categories. They are:

• Low Pressure: A processing unit operating at less than 225 pounds per square inch gauge (PSIG) measured at the outlet separator.>
• High Pressure: A processing unit operating at either equal to or greater than 225 pounds per square inch gauge (PSIG) measured at the outlet separator.

CBOB - Conventional gasoline blendstock intended for blending with oxygenates downstream of the refinery where it was produced. CBOB must become conventional gasoline after blending with oxygenates. Motor gasoline blending components that require blending other than with oxygenates to become finished conventional gasoline are reported as All Other Motor Gasoline Blending Components. Excludes reformulated blendstock for oxygenate blending(RBOB).

Cetane - A measure of the ignition quality of a diesel fuel. Regular diesel generally has a cetane number of 40-45; while most premium cetanes have numbers between 45-50.

Chain Marketer - An independent marketer who retails gasoline through a chain of private branded gasoline or motor fuel outlets that are staffed with their own workers (company-ops).

Charge Capacity - The input (feed) capacity of the refinery processing facilities.

Class I - VIII Trucks (Classification by Gross Vehicle Weight):

Class GVW

I 6,000 lbs. or less
II 6,00 1 - 10,000 lbs.
III 10,001-14,000 lbs.
IV 14,001-16,000 lbs.
V 16,001-19,500 lbs.
VI 19,501-26,000 lbs.
VII 26,001-33,000 lbs.
VIII 33,001 lbs. or more

Clearing Member - Term which applies to a member or a member firm of the NYMEX who has met the capital requirements to become a member of the clearing house and can accept and manage trades executed on the floor. All trades have to eventually go through a clearing member, and it is the member's ultimate responsibility to guarantee performance.

Close - The short period at the end of a futures trading session each day at which the closing price range is established.

COFC - Container on (rail) flat car. A form of intermodal movement of freight.

Coal - A readily combustible black or brownish-black rock whose composition, including inherent moisture, consists of more than 50% by weight and more than 70% by volume of carbonaceous material. It is formed from plant remains that have been compacted, hardened, chemically altered, and metamorphosed by heat and pressure over geologic time.

Coker - An oil refining unit in which heavy feed such as flasher bottoms, cycle oil from a fluid catalytic cracker, or thermal cracked gas oil is subjected to high temperatures. This causes the feed to crack, creating lights oils. Coke – solid, densely packed carbons – builds up in the reactors of the unit and periodically needs to be removed.

Collar - Term which refers to a futures or derivatives program where the buyer locks in a price ceiling, but also a price floor. A trucking company which caps its autumn price at 60cts gal but only shares in downward moves to 50cts/gal has utilized a "collar" program from its supplier.

Combination Vehicle - An equipment configuration which includes a separate power unit (tractor) and at least one trailer.

Commercials - Oil companies, as opposed to speculators. Usually involved in a futures environment.

Commercial Trailer - A trailer used to handle freight in the transportation of goods for others; excludes house trailers, light farm trailers and car trailers.

Commingling - Term which generally applies to the mixing of two petroleum products with similar specifications. Most branded gasoline firms require that their product not be commingled to preserve the integrity of the brand.

Commission House - Term for the entities which buy and sell actual futures contracts for customers in exchange for a commission. Also known in the trade as a futures commission merchant or FCM.

Common Carrier - A pipeline or transport company which has government authority to move product for hire, operating like a public utility with standard rates for various shipments.

Condensate - A naturally occurring gaseous hydrocarbon that liquefies when cooled to surface temperature. Condensate is considered to be a part of Crude Oil production. This definition is contested by some OPEC members who want to produce large quantities of this product outside official OPEC quotas.

Congested Market - A period of repetitious and limited price fluctuations within a tight trading range.

Contango - Term that describes a market which features higher prices for more distant delivery of futures contracts. If prompt crude is $18 bbl and delivery two months hence is $19 bbl, the market is said to be in contango. A market in severe contango can often suggest a specification change or a complete lack of storage.

Conversion Refining Capacity - The ability to perform those processes in gasoline production that adds octane. This process is considered more complex than basic distillation.

Correlation Coefficient - A statistical factor measuring how well any two markets (i.e. a cash market and a futures market) move in unison. A correlation coefficient of 1 would indicate a perfect 1-to-1 relationship.

Cost-Plus - A pricing mechanism, commonly used by transportation firms. Takes an OPIS average, adds in a specific "cost" (i.e., freight, or a mark-up), to create a buying price.

Cost of Carry - The cost to physically store crude or petroleum products, including storage fees, insurance, inspections and capital costs.

Cover - To close out a long or short futures position.

CPO (Commodity Pool Operator) - Term which applies to a concern which pools money to trade commodities. The commodities version of a mutual fund.

Crack Spread - Term applied to the differential between what a typical refined products mix would yield, and the value of crude. The common crack spread features a per bbl reference derived of 66.6% unleaded gasoline and 33.4% No. 2 oil. The resulting average is compared to the WTI number for the resulting "crack spread."

Crude Distillation Unit - An oil refinery unit that separates crude oil into different products according to their individual boiling point ranges. Distillation allows for the materials to be separated without being subjected to conditions that would cause cracking or decomposition.

Crude Oil - A mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities. Depending upon the characteristics of the crude stream, it may also include:
• Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric pressure after being recovered from oil well (casinghead) gas in lease separators and are subsequently commingled with the crude stream without being separately measured. Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream is also included

• Small amounts of nonhydrocarbons produced from oil, such as sulfur and various metals

• Drip gases, and liquid hydrocarbons produced from tar sands, gilsonite, and oil shale.
Liquids produced at natural gas processing plants are excluded. Crude oil is refined to produce a wide array of petroleum products, including heating oils; gasoline, diesel and jet fuels; lubricants; asphalt; ethane, propane, and butane; and many other products used for their energy or chemical content.

Crude oil is considered as either domestic or foreign, according to the following:

   • Domestic - Crude oil produced in the United States or from its “outer continental shelf’ as defined in 43 USC 1331.
   • Foreign - Crude oil produced outside the United States. Imported Athabasca hydrocarbons (tar sands from Canada) are included.

Crude Oil, Refinery Receipts - Receipts of domestic and foreign crude oil at a refinery. Includes all crude oil in transit except crude oil in transit by pipeline. Foreign crude oil is reported as a receipt only after entry through customs. Crude oil of foreign origin held in bonded storage is excluded.

Crude Oil Losses - Represents the volume of crude oil reported by petroleum refineries as being lost in their operations. These losses are due to spills, contamination, fires, etc. as opposed to refinery processing losses.

Crude Oil Production - The volume of crude oil produced from oil reservoirs during given periods of time. The amount of such production for a given period is measured as volumes delivered from lease storage tanks (i.e., the point of custody transfer) to pipelines, trucks, or other media for transport to refineries or terminals with adjustments for (1) net differences between opening and closing lease inventories, and (2) basic sediment and water (BS&W).

Crude Oil Qualities - Refers to two properties of crude oil, the sulfur content and API gravity, which affect processing complexity and product characteristics.

Crude Unit - The initial refining operation in which the basic cuts of fuel are distilled out of
crude oil.

Current Delivery Month - The futures contract date closest to expiration. Contracts are usually referred to by month (i.e. September Crude refers to crude contracts that are to be delivered in September)

Daily Closing Average - An average of all rack suppliers (without those denoted as out-of-product), calculated for either gross or net. Calculated no later than 5:59 p.m. EST daily.

Daily Contract Average - An average of all rack suppliers (with the exception of those denoted as out of product), calculated either as gross or net average. Calculated at approximately10:00 a.m. EST daily to allow time for our pricing specialists to do a validation check on the data. Branded and unbranded averages are also available.

Day Order - Type of order to purchase or sell a futures contract where the order is valid for one day unless you specify otherwise.

Day Trade - The purchase and sale of a futures or option contract during the same business day. Much of the activity of locals is focused around day trading.

Dealer Tankwagon (DTW) - The price that the dealer pays to its supplier, usually a jobber or refiner. Dealer prices are usually higher than rack prices because they include transportation costs. A tankwagon is the actual vehicle that the supplier or jobber uses to transport product to the dealer.

Deferred Futures - Contracts that will mature beyond the current delivery month. Also called distant or back contracts.

Degree Days - The number of degrees per day that the daily average temperature is above 65 degrees Fahrenheit. The daily average temperature is the mean of the maximum and minimum temperature for a 24-hour period.

Delayed Coking - A process by which heavier crude oil fractions can be thermally decomposed under conditions of elevated temperatures and pressure to produce a mixture of lighter oils and petroleum coke. The light oils can be processed further in other refinery units to meet product specifications. The coke can be used either as a fuel or in other applications such as the manufacturing of steel or aluminum.

Delivered Spot - Detailed estimates of rack replacement costs using spot prices and including pipeline tariff costs, shrinkage fees, proprietary additive fees plus other miscellaneous costs.

Delivery - The satisfaction of a futures contract by the tendering of the actual physical commodity.

Derivatives - General term used to describe the class of futures-related instruments offered by oil companies, banks, large brokerage houses, etc. These programs are "derived" from general futures contracts, but often are tailor-made to individual market and company needs. Example: an oil company offering a price cap for No. 2 oil rack prices in Atlanta that's tied to an OPIS average is offering a derivative. These can be "wet," featuring actual physical purchases or sale, or "paper," where only money exchanges hands.

Desulfurization - The removal of sulfur, as from molten metals, petroleum oil, or flue gases. Petroleum desulfurization is a process that removes sulfur and its compounds from various streams during the refining process. Desulfurization processes include catalytic hydrotreating and other chemical/physical processes such as adsorption. Desulfurization processes vary based on the type of stream treated (e.g. naphtha, distillate, heavy gas oil, etc.) and the amount of sulfur removed (e.g. sulfur reduction to 10 ppm). See Catalytic Hydrotreating.

Disposition - The components of petroleum disposition are stock change, crude oil losses, refinery inputs, exports, and products supplied for domestic consumption.

Distillate - Includes No. 1, No. 2 and No. 4 fuel oils, and No. 1, No. 2 and No. 4 diesel fuels. These are light fuel oils for home heating, as a diesel engine fuel (including railroad engine fuel and fuel for agricultural machinery), and for electric power generation.

  • No. 1 Diesel Fuel - A light distillate fuel oil that has distillation temperatures of 550 degrees F at the 90-percent point and meets the specifications defined in ASTM Specification D 975. It is used in high speed diesel engines generally operated under frequent speed and load changes, such as those in city buses and similar vehicles.

 • No. 1 Fuel Oil - A light distillate fuel oil that has distillation temperatures of 400 degrees F at the 10-percent recovery point and 550 degrees F at the 90-percent point and meets the specifications defined in ASTM Specification D 396. It is used primarily as fuel for outdoor stoves and portable outdoor heaters.

 • No. 2 Diesel Fuel - A fuel oil that has distillation temperatures of 500 degrees F at the 10-percent recovery point and 640 degrees at the 90-percent recovery point and meets the specifications defined in ASTM Specification D 975. It is used in high speed diesel engines generally operated under uniform speed and load conditions, such as those in railroad locomotives, trucks and automobiles.

  • Low-Sulfur No. 2 Diesel Fuel - No. 2 diesel fuel that has a sulfur level no higher than 0.05 percent by weight. Used primarily in motor vehicle diesel engines for on-highway use.

  • High-Sulfur No. 2 Diesel Fuel - No. 2 diesel fuel that has a sulfur content above 0.05 percent by weight.

  • No. 2 Fuel Oil (Heating Oil) - A distillate fuel oil that has distillation temperatures of 400 degrees F at the 10-percent recovery point and 640 degrees F at the 90-percent recovery point and meets the specifications defined in ASTM Specification D 396. It is used in atomizing type burners for domestic heating or for moderate capacity commercial/industrial burner units.

  • No. 4 Fuel - A distillate fuel oil made by blending distillate fuel oil and residual fuel oil stocks. It conforms with ASTM Specification D 396 and is used extensively in industrial plants and in commercial burner installations that are not equipped with preheating facilities.

  • No. 2 Ultra Low-Sulfur - No. 2 Ultra-Low Sulfur has a sulfur content of less than 15 ppm and must be used to supply at least 80% of the nations on road diesel fuel sold at the retail level as of October 15, 2006. In addition to clear No. 2 low sulfur, OPIS also provides pricing for Red Dye, Premium, Low Emissions and Winter grades of Ultra low-sulfur diesel fuels. All of the OPIS Ultra Low-Sulfur diesel products are understood to include lubricity.

  •No. 2 Low-Sulfur - Clear low-sulfur (LS No.2) diesel has a sulfur content up to 500 ppm and can be used for up to 20% of the nations on road diesel fuel sold at the retail level. In addition to clear No. 2 low sulfur, OPIS also provides pricing for Red Dye, Premium, Winter, Low-Emissions Diesel and Lubricity grades of low-sulfur diesel fuels.

  • No. 2 High-Sulfur - Clear high-sulfur No.2 diesel is used as an off-road fuel for equipment such as farm machinery or as home heating oil.

  • No. 1 Low-Sulfur - Clear low-sulfur fuel is commonly used for “blending” on-road fuels. Diesel is blended during winter months to create a diesel fuel that will not solidify or gel in colder temperatures.

  • No. 1 High-Sulfur - Clear high sulfur is used for various off road agricultural and industrial purposes. Crop drying ovens is one example.

  • No. 4 Fuel - A distillate fuel oil made by blending distillate fuel oil and residual fuel oil stocks. It conforms with ASTM Specification D 396 and is used extensively in industrial plants and in commercial burner installations that are not equipped with preheating facilities.

  • Kerosene - Kerosene has a lower freeze point, lower flash point and lower pour point.

  • Red-dye - Diesel fuel is dyed red to denote it is being used for tax-exempt purposes. Entities that are tax-exempt (school boards, etc.) use red-dyed fuel because it is tax exempt. There is no difference in red-dyed product specifications. Red-dyed prices typically are 0.25 to 0.35cts higher than clear prices to recoup the charge for the dye and dying process.

  • Premium Diesel - The higher cetane rating is what makes a regular diesel a premium diesel, along with some type of detergent package that serves to clean the engine as the fuel is burned. Cetane is to diesel what octane is to gasoline. Premium diesel typically has a minimum 45 cetane rating, whereas regular diesel is closer to a 38 to 40 cetane.

  • Winter Diesel - During the winter months, on road diesel fuels may be blended with other diesel fuels or chemical additives to produce a Winter diesel that will not begin to solidify or gel due to cold temperatures. OPIS also provides pricing for Red Dye, Premium, and Lubricity grades of Winter diesel fuels.

  •Lubricity - Several states have mandated the use of a lubricity additive in several on road Low Sulfur diesel fuels. OPIS provides separate pricing displays for Low Sulfur and Low Sulfur with lubricity products. Diesel postings which may include lubricity are Low Sulfur, Red Dye, Winter and Premium diesel products. Since all Ultra-Low-Sulfur products must have a lubricity component, it is not necessary to maintain a separate lubricity product grouping within Ultra-Low-Sulfur products.

  •Low-Emissions Diesel - Beginning in October 2005, 110 counties East/Central Texas required the use of Low Emissions Diesel or LED in both on-road vehicles and in non-road agricultural and construction equipment. LED diesel must contain less than 10% by volume of aromatic hydrocarbons and must have a cetane number of 48 or greater.

  • Biodiesel - Made from renewable resources like soybeans and other natural fats and oils. It works in any diesel engine with few or no modifications. It can be used in pure form (B100) or blended with petroleum diesel at any level. Some states are now mandating the use of biodiesel.

Distillation - The most basic refining operation that heats the crude oil and condenses the cuts in a fractionating column in order to separate the various petroleum products for further processing.

Department of Energy (DOE) - The U.S. federal government agency establishing programs and policies regarding national energy matters.

Dolly - An auxiliary axle assembly having a fifth wheel used for the purpose of converting a semitrailer to a full trailer.

Domestic Intercity Trucking - Trucking operations within the territory of the United States, including intra-Hawaiian and intra-Alaskan, which carry freight beyond the local areas and commercial zones.

Department of Transportation (DOT) - Department responsible for establishing the nation’s overall transportation policy.

DOT Authorized Motor Carrier - A carrier that has been registered with the Department of Transportation and assigned a DOT number.

Double - A combination of two trailers pulled by a power unit. Usually refers to a power unit pulling two 28' trailers. See also Rocky Mountain Double and Turnpike Double.

Downstream - Term applying to functions or facilities closer to the end-user. Refining and marketing are generally downstream processes in the oil patch while exploration and production are upstream. However, the term also applies to any function or facility below the point of reference: retailing is downstream of terminaling.

Dual Trading - The practice by which a floor broker can trade for both his own account and execute orders for off-the-floor customers. Some contend that dual trading leads to the illegal practice of front-running, where unscrupulous individuals can trade for their account ahead of a large order from another customer.

Dubai - The most widely traded Middle East spot market crude, produced in the United Arab Emirates.

Exchange of Futures for Physicals (EFP) - Another means of making delivery in the futures market. EFP's would allow for a delivery of physical product that doesn't necessarily conform to NYMEX specifications (delivery at say, Baltimore). Terms can vary across a broad spectrum including location, time, and product specifications.

Energy Information Administration (EIA) - A division of the Department of Energy that compiles data on petroleum supply and demand on a weekly and monthly basis. These figures are not as timely as API statistics, but are considered more accurate.

Electronic Trading - A futures trading system that automatically matches buyers and sellers through a computerized system, as opposed to the current open outcry system.

Electricity (Purchased) - Electricity purchased for refinery operations that is not produced within the refinery complex.

End User - The ultimate consumer of petroleum products; most commonly used in connection with large industrial or utility consumers.

Ending Stocks - Primary stocks of crude oil and petroleum products held in storage as of 12 midnight on the last day of the month. Primary stocks include crude oil or petroleum products held in storage at (or in) leases, refineries, natural gas processing plants, pipelines, tank farms, and bulk terminals that can store at least 50,000 barrels of petroleum products or that can receive petroleum products by tanker, barge, or pipeline. Crude oil that is in-transit by water from Alaska, or that is stored on Federal leases or in the Strategic Petroleum Reserve is included. Primary Stocks exclude stocks of foreign origin that are held in bonded warehouse storage.

ETBE (Ethyl tertiary butyl ether) (CH3)3COC2H5 - An oxygenate blend stock formed by the catalytic etherfication of isobutylene with ethanol.

Ethane (C2H6) - A normally gaseous straight-chain hydrocarbon. It is a colorless paraffinic gas that boils at a temperature of -127.48 degrees Fahrenheit. It is extracted from natural gas and refinery gas streams.

Ethanol - An alcohol which is most often derived from corn. Ethanol is designed to be blended with gasoline to produce a cleaner burning fuel, and is an accepted oxygenate component for the oxygenated seasons mandated by the EPA.

Ether - A generic term applied to a group of organic chemical compounds composed of carbon, hydrogen, and oxygen, characterized by an oxygen atom attached to two carbon atoms (e.g., methyl tertiary butyl ether).

Ethylene (C2H4) - An olefinic hydrocarbon recovered from refinery processes or petrochemical processes. Ethylene is used as a petrochemical feedstock for numerous chemical applications and the production of consumer goods.

Exports - Shipments of crude oil and petroleum products from the 50 States and the District of Columbia to foreign countries, Puerto Rico, the Virgin Islands, and other U.S. possessions and territories.

Feedstock - Any of the raw or semifinished materials which move to the various units of a refinery or petrochemical plant. Crude is a feedstock, but the term is mainly used to describe raw materials after the distillation process which in turn go on to more sophisticated units at the refinery. VGO, catfeed, naphtha, condensate and straight run residual fuel are commonly referred to as feedstocks.

Field Production - Represents crude oil production on leases, natural gas liquids production at natural gas processing plants, new supply of other hydrocarbons/ oxygenates and motor gasoline blending components, and fuel ethanol blended into finished motor gasoline.

Flexicoking - A thermal cracking process which converts heavy hydrocarbons such as crude oil, tar sands bitumen, and distillation residues into light hydrocarbons. Feedstocks can be any pumpable hydrocarbons including those containing high concentrations of sulfur and metals.

Fluid Catalytic Cracker (FCC) - An oil refining unit in which a catalyst combines with a vacuum gas oil range feedstock at high temperatures to cause a reaction. This is the most popular design for catalytic cracking in a refinery.

Fluid Coking - A thermal cracking process utilizing the fluidized-solids technique to remove carbon (coke) for continuous conversion of heavy, low-grade oils into lighter products.

FOB - Terms of a transaction where the seller agrees to make the product available within an agreed-upon time period at a given location. Any subsequent costs are the responsibility of the buyer.

Floor Broker - An exchange member who executes orders for futures contracts in the trading pit.

Floor Trader - A trader in a futures pit that executes trades solely for his own account.

Force Majeure - The legal cancellation of a delivery obligation due to the occurrence of natural acts beyond the direct control of the seller (i.e., operating problems with tankers or refineries or weather disruptions).

Forward Market - Cash market (non-exchange) commitment to delivery of petroleum products or crude at a set price for future delivery (i.e., a fixed price contract).

Fractions - The different cuts of petroleum products that come off a distillation column contingent on their volatility or boiling range.

Freight Forwarder - An individual or company that accepts less-than-truckload (LTL) or less-than-carload (LCL) shipments from shippers and combines them into carload or truckload lots. Designated as a common carrier under the Interstate Commerce Act.

Fresh Feed Input - Represents input of material (crude oil, unfinished oils, natural gas liquids, other hydrocarbons and oxygenates or finished products) to processing units at a refinery that is being processed (input) into a particular unit for the first time. Examples:
   • Unfinished oils coming out of a crude oil distillation unit which are input into a catalytic cracking unit are considered fresh feed to the catalytic cracking unit.
   • Unfinished oils coming out of a catalytic cracking unit being looped back into the same catalytic cracking unit to be reprocessed are not considered fresh feed.

Front-running - Illegal practice where a floor broker executes an order for his own account before executing an order for a customer, with the intent of getting ahead of a market move precipitated by the customer's order. A broker who went long 10 contracts of December crude just before he executed a buy order for 500 contracts would be "front-running." The audit trail, which timestamps when orders are received, etc., is intended to make this practice difficult to get away with.

Fuel Ethanol (C2H5OH) - An anhydrous denatured aliphatic alcohol intended for gasoline blending as described in Oxygenates definition.

Fuels Solvent Deasphalting - A refining process for removing asphalt compounds from petroleum fractions, such as reduced crude oil. The recovered stream from this process is used to produce fuel products.

Fundamentals - Pricing analysis based on supply and demand factors for any particular market.

Fundamental Analysis - Analysis derived from actual supply and demand factors such as inventories, refinery operations, physical buying patterns, or disruptions in the supply and distribution chain. Contrasts with technical analysis.

Fungible - Term which refers to the likeness or at least "interchangeability of a petroleum product." Material shipped on a pipeline must be "fungible," i.e., have a common set of specifications acceptable to various shippers, and the same holds true for futures contracts. The less fungible the product, the less likely it is to succeed in the futures arena and the more problem it is likely to create in the distribution process. Various elements of the Clean Air Act have made several petroleum products less fungible.

Furnace Oil - Canadian term used to describe high-sulfur No. 2 oil. So furnace oil in Canada is the equivalent of our high-sulfur, off-road, home heating oil.

Futures - A standardized contract for the future purchase or sale of a commodity on a formalized exchange.

Futures Margin - A deposit required of futures participants that guarantees assurance of performance. Funds are on hand to assure that the buyer or seller makes good on any losses that might accrue on his position. Margin deposits are a sort of futures performance bond.

Gallon - Measurement of volume in the oil industry (42 gallons=1barrel).

Gasoil - Commonly, the European term used for diesel fuel and heating oil.

Gasohol - A blend of finished motor gasoline containing alcohol (generally ethanol but sometimes methanol) at a concentration of 10% or less by volume. Data on gasohol that has at least 2.7% oxygen, by weight, and is intended for sale inside carbon monoxide nonattainment areas are included in data on oxygenated gasoline. See Oxygenates.

Gasoline - A complex mixture of relatively volatile hydrocarbons with or without small quantities of additives, blended to form a fuel suitable for use in spark-ignition engines. Motor gasoline, as defined in ASTM Specification D 4814, is characterized as having a boiling range of 122 to 158 degrees F at the 10 percent recovery point to 365-374 degrees F at the 90 percent recovery point.