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.

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 higher the API gravity, the lighter the compound. Light crudes generally exceed 38 degrees API and heavy crudes are commonly labeled as those with an API gravity of 22 degrees or below, with intermediate crudes falling into the range in between.

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 - 1.A mixture of bitumen and mineral aggregate as prepared for the construction of roads or in other paving uses. 2.in the US it refers to the product that is known as bitumen in the rest of the world.

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

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.

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 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.

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.

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 - A specific supply arrangement with a supplier that markets a specific brand. The supplier is usually contractually obligated to sell a specific amount of product to the reseller.

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.

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.

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.

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.

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. Can handle high sulfur feedstocks without prior desulfurization.

Catalytic Reforming - A refining process using controlled heat and pressure with catalysts to convert paraffinic and naphthenic type hydrocarbons into petrochemical feedstocks and higher octane stocks suitable for blending into finished gasoline.

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).

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.

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 Oil - A mixture of hydrocarbons that exists in liquid phase in underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities. Lease condensate and drips are included but topped crude oil (residual) and other unfinished oils are excluded.

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 as ONLY a gross average. Calculated at 10:00 a.m. EST daily to allow time for our pricing specialists to do a reasonableness validation check on the data.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.
       • Reformulated Gasoline - Finished motor gasoline, the composition and properties of which meet the requirements of the reformulated gasoline regulations promulgated by the U.S. EPA under Section 211(k) of the Clean Air Act.
       • Oxygenated Gasoline - Finished motor gasoline, other than reformulated gasoline, having an oxygen content of 2.7 percent or higher by weight.

General Freight Carrier - A carrier which handles a wide variety of commodities.

Globex - A global automated trade execution system (see electronic trading) created by the Chicago Merc and Reuters. The New York Mercantile Exchange approved the implementation of this system to supplement pit trading after hours.

Gross Average - An average of all suppliers, calculated without the deduction of any pre-payment terms.

Gross Combination Weight (GCW) - The maximum allowable fully laden weight of a tractor and its trailer(s).

Gross Domestic Product - A measure of the money value of the goods and services becoming available to the nation from economic activity within the United States.

Gross Vehicle Weight (GVW) - The maximum allowable fully laden weight of a truck and its payload. The most common classification scheme used by manufacturers and by states.

Group III Market - Spot market vernacular for a Midwest delivery. It specifically entails delivery on Williams Pipeline at Tulsa, Okla., but more generally encompasses Oklahoma, Missouri, Kansas, Iowa, Nebraska, Minnesota, South Dakota and North Dakota.

Gulf Coast Spot Market - Large volume transactions (from 25,000 barrels to full tankers of petroleum products) bought or sold for a stipulated delivery in the near future. Although this market might entail several pipeline or waterborne transaction points in the Texas and Louisiana area, unless specified otherwise, it reflects the delivery of the product the same month at a Pasadena, Texas, origin on Colonial Pipeline.

Heating Oil - A distillate used for home or commercial heating. Widely used as a synonym for No. 2 fuel oil or diesel.

Heavy Duty Truck - Truck with a gross vehicle weight generally in excess of 19,500 pounds (Class VI VIII). Other minimum weights are used by various laws or government agencies.

Hedger - Oil industry participant who takes a futures, options, or derivatives position opposite that of a position held in the cash or contract market. A refiner who sells 500 forward gasoline contracts against his future production is hedging. A hedger is looking to reduce risk in exchange for a guaranteed margin, but he may forego larger profits in reducing his exposure.

Hedging - The initiation of an opposite futures position to protect a cash market position from an adverse price movement.

Highway-User Fee or Tax - A charge levied on persons or organizations based on the use of public roads. Funds collected are usually applied toward highway construction, reconstruction and maintenance. Examples include vehicle registration fees, fuel taxes and weight-distance taxes.

Historical Volatility - The annualized standard deviation of percent variation in futures prices over a specific period of time. Indicates past volatility in the marketplace.

Hydrocracking - A refining process for converting middle distillates to high octane gasoline, jet fuel, or high grade diesel through the introduction of a hydrogen catalysts under very high pressure.

Hydrotreater - A refining unit whereby processed material from the crude units are treated in the presence of catalysts and hydrogen, often to remove sulfur and other unwanted substances. The hydrotreater is often the critical unit for producing jet fuel and low-sulfur diesel.

International Energy Agency (IEA) - An agency in Paris, France, which tracks energy statistics and information on an international level.

Implied Volatility - A measurement of the market's expected price range and variation for the underlying commodity futures based on market traded options premiums. Differs from historical volatility, which lists annualized standard deviation of percent changes in futures prices over a specific period.

Initial Margin - Funds required to establish a new position. Exchanges set minimums depending on volatility, market conditions, etc. and the brokerage firm may set margins above these exchange minimums. Margins for a would-be speculator are much higher than for a bona fide hedger.

Integrated Oil Company - A company involved in all aspects of the petroleum business from wellhead crude production to retail sales of refined petroleum products.

Intercity Trucking - Trucking operations which carry freight beyond the local areas and commercial zones.

Interface - A mixture of petroleum products occurring when batches of different products are shipped consecutively through a pipeline.

Intermodal Transportation - Transportation movement involving more than one mode (e.g. rail/motor, motor/air, or rail/water).

Interstate Commerce Commission (ICC) - Former motor carrier regulating authority, eliminated by the ICC Termination Act of 1995 (see DOT).

In the Money Option (Calls) - Refers to an option where the futures price has exceeded the strike price on which it is based. An option to buy December heating oil at 60cts/gal is "in the money" when Dec. heating oil futures move above 60cts/gal. A put option for 60cts/gal would be "in the money" if the futures price is under the 60cts/gal strike price.

Intrinsic Value - The amount by which an options contract is in the money. A 60cts/gal call option would have 2cts/gal of "intrinsic value" if the underlying futures price were 62cts/gal.

Introducing Broker (IB) - A firm that solely solicits or accepts orders for the purchase or sale of futures contracts or options.

Inverted Market - See backwardation.

International Petroleum Exchange (IPE) - International Petroleum Exchange, based in London, is the European equivalent of the NYMEX. IPE operates an exchange which trades Brent and gasoil (heating oil) futures among other energy contracts.

ISTEA - Intermodal Surface Transportation Efficiency Act of 1991.

Isomerization - An alternative refining process to reforming which rearranges straight chains of hydrocarbons through the introduction of aluminum or a precious metal catalyst to form a higher octane blending component for gasoline.

Jobber - Someone who purchases refined products at the wholesale level and then transfers or resells the product at the retail level. The retail level sale/transfer can occur at facilities owned by the jobber, independent dealers or commercial accounts.

LCV - Longer combination vehicle.

Last Trading Day - The final trading session on a futures contact. Any contracts left open at the end must be settled by delivery. On the NYMEX, this falls on the last business day of the month for products and the third business day prior to the 25th on crude.

Less than Truckload (LTL) - A quantity of freight less than that required for the application of a truckload rate. Usually less than 10,000 pounds and generally involves the use of terminal facilities to break and consolidate shipments.

Limit Move - The maximum one-day price advance or decline permitted from the previous day’s settlement price. Not applicable to the current contract. The limit move is 2 cents on products and $1.00 on crude.

Limit Order - An order to buy/sell a futures/ options contract with a price limit. If it's a buy order, it can't be executed higher than the limit listed (e.g. 70cts gal). If it's a sell order, it can't be executed lower than the limit.

Liquified Petroleum Gases (LPG) - A group of hydrocarbon-based gases derived from crude oil refining or natural gas fractionation, that are often liquified, through pressurization, for ease of transport. They include: ethane, propane, normal butane, and isobutane. Uses of these fuels include: home heating, industrial, automotive fuel, petrochemical feedstocks and in farming for drying purposes.

Locals - Term which describes the floor traders who provide liquidity for NYMEX traders; locals often are floor brokers who trade for their own account. Locals operate in the various pits of the NYMEX and typically trade large volumes and cash in profits or losses after small changes in price.

Long - Having an outstanding position where one has bought a futures contract or a wet bbl. A speculative "long" would be hopeful of a market increase. A lot of "length" in the wet or futures market could be descriptive of a market where too many buyers are holding inventory.

LP - A shorthand reference commonly applied to propane, which is used as a home heating and cooking fuel, and as a petrochemical feedstock.

Margin - The funds deposited by a buyer or seller of a futures contract that ensure performance of the contract.

Margin Call - A demand for initial or variation margin from a commission house to a customer and/or from the clearing house to a clearing member.

Market on Close (MOC) - An order to buy/sell a futures/options contract which won't be executed until the close of trading that day. It will be executed at the best possible price within the closing minutes of the market.

Middle East Economic Survey (MEES) - An influential Nicosia-based newsletter which is regarded as particularly close to Arabian Gulf producer politics and intentions.

Merc - See NYMEX (New York Mercantile Exchange).

Midco (Midcontinent) - A spot market designation for product delivered in Chicago.

Modal Share - The percentage of total freight moved by a particular type of transportation.

Methyl Tertiary Butyl Ether (MTBE) - An ether used in the blending of reformulated gasolines, affecting vapor pressure and octane level. Unlike ethanol, MTBE is fungible and will not separate out during shipment.

N-Grade - A pipeline designation for unleaded gasoline.

Naked Option - Sale of an option (either a put or a call) without ownership of the underlying futures contract.

Naphtha - A petroleum product off of the distillation process (220°F to 315°F) that is subsequently upgraded to make up the major constituent of gasoline.

Nation’s Freight Bill - The amount spent annually on freight transportation by the nation's shippers; also represents the total revenue of all carriers operating in the nation.

Natural Gas - A naturally-occurring raw material often produced in conjunction with crude oil that is processed through a variety of facilities to yield NGLs. It is a commercially acceptable product for industrial and residential consumption and is shipped via pipeline.

Natural Gas Liquids - A hydrocarbon that is extracted from the ground as a gas. Chemically natural gas is called "methane." The gas from the ground is processed in several stages at various processing plants and either prepared for the natural gas market (home heating and industrial use), or for fractionation where gas liquids (ethane, propane butane, etc.) are separated from the "raw make."

Net Average - An average of all rack suppliers, calculated with any prepayment discount reduced from the applicable suppliers.

Net Profit Margin - A measure of profitability based on the ratio of net income to total operating revenues.

Netbacks - The price a refiner receives for the sale of petroleum products after deducting the transportation or affiliated costs in shipping the product from its point of origin (i.e., pipeline tariffs, waterborne freight, storage fees, line loss, cost of capital, etc.).

Netback Differential - The difference between the spot and rack prices for refined petroleum products.

Netback Pricing or Agreements - Contractual crude oil arrangements very prevalent during the mid-80’s which set the sales price of crude oil on the value of the derivative petroleum products.

National Futues Association (NFA) - Trade association which is responsible for promoting and monitoring rules of conduct, and which mediates disputes between customers and brokers. One of the regulatory bodies which oversees futures trading.

Nomination - The notification by the seller of a spot market obligation of the attempt to deliver the product to satisfy the commitment.

Non-Regulated Trucking - A carrier which is exempt from economic regulation (e.g. exempt from agricultural shipments and private trucking operations).

Non-TET - The designation used within the industry to specify that product is in a location at Mont Belvieu other than the Texas Eastern Products Pipeline, LP storage, or physically in the pipeline, at Mont Belvieu, Texas. Non-TET locations include facilities owned and operated by Valero, Enterprise Products Partners, Targa Resources, etc. BBL located in non-TET storage may be shipped via pipeline to TET, or moved to various other locations such as end users (petrochemical companies, export facilities, the Dixie Pipeline, etc.)

NOPEC - A group of independent crude oil producing nations that are not members of OPEC, but have collectively restricted production levels in support of OPEC. Includes Malaysia, Mexico, Oman, Egypt, Angola, China and Columbia.

New York Mercantile Exchange (NYMEX) - Exchange where a number of commodities, including WTI crude, heating oil and unleaded gasoline are traded on a future basis.

Oil, Chemical and Atomic Workers Union (OCAW) - The principal labor group at U.S. refineries. Refinery strikes are generally called by this union or its affiliates.

Octane - A measure of the performance quality of gasoline in terms of antiknock qualities. The higher the octane number, the greater the antiknock qualities.

Off-Road Diesel - Nothing more than high-sulfur No. 2 oil -- same as home heating oil. This fuel can be used for off-road purposes such as powering diesel construction equipment.

Offshore Block - Refers to a designated piece of property in a body of water for mineral exploration. The Gulf of Mexico has many "areas" that are divided up into blocks to be leased to companies for exploration.

Organization of Petroleum Exporting Countries (OPEC) - Countries which have organized for the purpose of negotiating with oil companies on matters of oil production, prices and future concession rights. Current members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

Open Interest - Figures published by the NYMEX which indicate the number of outstanding positions in a futures contract. An open interest number of 100,000 means that there are 50,000 long and 50,000 outstanding short positions. Rises or falls in open interest are often key barometers of whether a market is rising/falling thanks to new buying/selling or liquidation by existing participants. A rise in open interest after a market rally is often indicative of new buying, whereas a fall would have been representative of short covering.

Open Order - An order to buy or sell a futures contract or option which is good until it is cancelled. An order to buy crude at say $19 bbl, will be good until it's filled, with the brokerage house typically checking with clients at various intervals to see if there is interest in changing the order.

Opening - The period at the beginning of a trading session as designated by the exchange.

Open Outcry - A public auction form of futures trading where bids and offers are made directly between traders in an exchange pit.

Operating Expenses - The costs of handling traffic, including both direct costs (driver wages and fuel) and indirect costs (computer expenses and advertising), but excluding interest expenses.

Operating Ratio - A measure of profitability based on operating expenses as a percentage of gross revenues.

OPIS Benchmark Averages - Published averages commonly used as a basis for buying/selling fuel: contract, closing daily averages, newsletter and 5-day averages published in the weekly OPIS newsletter.

OPIS Low - The lowest supplier price at that particular rack on that day. Available in standard, newsletter, and/or terminal display.

OPIS High - The highest supplier price at that particular rack on that day. Available in standard, newsletter, and/or terminal display.

OPIS Newsletter Average - The published Thursday evening average (except on certain holiday weeks) in the printed OPIS newsletter. This average is ALWAYS gross. The OPIS Newsletter started in 1980 when the market moved only once a week. Since major fuel purchases are referenced to this published price, it is one of many benchmarks available from OPIS today.

OPIS Rack Prices - A daily (Mon-Sat), independent, published survey of supplier prices without taxes, freight or superfund for gasoline and diesel fuel at over 355 U.S. rack distribution points.

OPIS Terminal Display - Shows all terminals at a given location for every supplier by product. The OPIS Terminal Display includes terminal location and terminal owner.

Option - A contract traded on a futures exchange giving the buyer the right, but not the obligation, to buy (a call option) or sell (a put option) a specific quantity of a commodity from the seller or writer of the option.

Oxygenated Fuels - Non-hydrocarbon additives—including MTBE, ethanol and methanol—which boost octane and produce a cleaner combustion.

Out Month - OPIS prices labeled as "out month" represent transactions for product that buyer and seller agree will be delivered any time in the next calendar month.

Out of Product - OPIS marks "out-of-product" if a rack supplier's product is confirmed unavailable for more than 24 hours. Postings which meet this criteria will be designated "out-of-product" with an "o" next to the listing, and these numbers will not be part of the OPIS lows, highs or averages.

Out of the Money Option - Refers to an option where the futures price is less than the strike price for the appropriate call, or higher than the strike price for puts.

Over the Rack - Petroleum products sold at the wholesale level from primary storage. Refers to loading racks where tanker trucks fill up. Also Rack Market.

Overbought - A trading term used to express the opinion that prices have escalated rapidly, and therefore are subject to a sell-off as positions are liquidated.

Oversold - The opposite of overbought.

Oxygenated Gasoline - Finished motor gasoline, other than reformulated gasoline, having an oxygen content of 2.7 percent or higher by weight.

Oxygenates - Substances which, when added to gasoline, increase the amount of oxygen in that gasoline blend. Ethanol, Methyl tertiary butyl ether (MTBE), Ethyl tertiary butyl ether (ETBE), and methanol are common oxygenates.

Petroleum Administration For Defense Districts (PADD) - Five geographic areaa into which the United States was divided by the Petroleum Administration for Defense for purposes of administration during federal price controls or oil allocation. They are:
       • PADD1: Connecticut, Delaware, District of Columbia, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and West Virginia.
       • PADD2: Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee and Wisconsin.
       • PADD3: Alabama, Arkansas, Louisiana, Mississippi, New Mexico and Texas.
       • PADD4: Colorado, Idaho, Montana, Utah and Wyoming.
       • PADD5: Alaska, Arizona, California, Hawaii, Nevada, Oregon and Washington.

Petrochemical - An intermediate product derived from crude and natural gas processing that is used in production of a wide range of products, including plastics. Also the facility that processes these intermediate products. Petrochemical plants are often integrated with major refineries.

Piggyback - The transportation of highway trailers or removable trailer bodies on rail cars specifically equipped for the service. It is essentially a joint carrier movement in which the motor carrier forms a pickup and delivery operation to a rail terminal, as well as a delivery operation at the terminating rail head

Pipeline Tender - See Batch.

Pipelines - A network that allows crude oil, refined products and gas liquids to move across the country, usually from either refineries to terminals or from coastal (import) locations to terminals and refineries further inland.

Pit Trading - Trading conducted within the normal hours of the NYMEX inside the open outcry pits. Pit hours are generally 9:45 a.m. to 3:10 p.m. Eastern time for most contracts. With the advent of overnight or after hours trading on the ACCESS automated system, it has become necessary to identify pit trading.

Platform - A structure that draws fuel from an underground source. Usually referring to an offshore rig that also transmits fuel from that location via pipeline.

Point - 1/100th of a cent ($0.0001).

Position Limit - The maximum number of allowable open contracts for a single trader or a firm in a given futures contract.

Power Units - The control and pulling vehicle for trailers and semitrailers.

Primary Storage - Petroleum storage tanks at refineries, pipelines and oil company terminals. Product inventory changes at these facilities are what constitute API and EIA demand computations. See also secondary and tertiary storage.

Product Authorization - Authorization by a shipper in a pipeline allowing another supplier to draw product on account, either on a limited or unlimited basis.

Prompt - Term used in reference to wet bbl delivery timetable. OPIS prices recognize the "prompt" timeframe as signifying delivery in the earliest possible pipeline cycle slot, or for waterborne pickup of material available in the next 24-72 hours.

Prompt Current Month - OPIS prices labeled as "prompt current month" represent transactions for product that buyer and seller agree will be delivered within the next 72 hours.

Prompt Delivery (Prompts) - Designates a spot market delivery that must be made in the next few days as stipulated by the contract.

Product Transfer Order (PTO) - Pipeline authorizations transferring title to a set quantity of product at a specific location to another shipper.

Put Option - Also referred to simply as a "put." Refers to an option which gives the buyer the right, but not the obligation, to sell a futures contract at a specified strike price.

RBOB - A blend-stock added to an oxygenated gasoline to create RFG or OPRG products.

Rack Market - Petroleum products sold at the wholesale level from primary storage. Refers to loading racks where tanker trucks fill up. Also Over the Rack.

Raffinate - The residual product left after a reforming process. The term also has been more generally used in reference to any low octane product left over after any secondary refining process. Preferable to natural gasoline in ethanol/gasoline blends because of the low RVP (4 to 8).

Regulated Motor Carrier - A carrier subject to economic regulation by the Department of Transportation.

Refinery - An installation that manufacturers finished petroleum products from crude oil, unfinished oils, natural gas liquids, other hydrocarbons and oxygenates.

Reforming - See Catalytic Reforming.

Residual Fuel (Resid) - A general classification for the heavier oils, known as No. 5 and No. 6 fuel oils, that remain after the distillate fuel oils and lighter hydrocarbons are distilled away in refinery operations, and conform to ASTM Specifications D396 and D975. No. 5 oil is used in steam-powered government vessels and inshore power plants. No. 6 fuel oil includes Bunker C fuel and is used for the production of electric power, space heating, vessel bunkering and various industrial purposes.

Resistance - A technical level where the current price of a commodity will have difficulty penetrating on a price trend.

Reverse Crack Spread - A spread trade implemented when a speculator thinks refiner margins will narrow. Products contracts are bought against crude contracts sold. See Crack Spread.

Rocky Mountain Double - A combination vehicle consisting of a tractor, a 45 to 48 foot semitrailer and a shorter 28 foot semitrailer.

Round Turn - Both sides of a futures contract. When a commission is paid for a futures transaction, it is usually paid on a "round turn" basis where it covers both the purchase and sale.

Rotterdam - A port in the Netherlands. The most prevalent transaction point for spot market petroleum on the European continent. The second largest refining center in the world after Houston.

Reid Vapor Pressure (RVP) - The volatility or tendency of a petroleum product to evaporate. The lower the number, the more stable the product. RVP is used to measure pressure in terms of pounds per square inch (psi). In terms of gasoline, RVP is used as an ozone control mechanism.

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.

Secondary Storage - Petroleum storage tanks consisting of retail gas stations, bulk plants and commercial storage.

Semitrailer - Truck trailer equipped with one or more axles and constructed so that the front end rests upon a truck tractor.

Settlement/Settling Price - The price established by the Exchange Settlement Committee at the close of each trading session as the official price that will be used by the clearing house in determining net gains or losses on the day. The settlement or settling price provides the benchmark by which margin requirements and the next day's price limits are made. There are frequently significant variations between closing prices - those trades witnessed immediately before the closing bell, and the settlement prices.

Short - Having an outstanding position to sell a wet bbl or a futures contract. A speculative "short" trader would be hopeful of a market decline so he could eventually buy back his bbl at a lower price. A market with too many short traders is often described as oversold.

Short Covering - Description which usually pertains to a market where speculative shorts are covering or cancelling out their positions by buying product. A rally from short covering is not indicative of new buying and is often violent but brief.

Singapore International Money Exchange (SIMEX) - A futures exchange in Singapore trading fuel oil.

Specialized Carrier - A trucking company franchised to transport articles which, because size, shape, weight, or other inherent characteristics, require special equipment for loading, unloading or transporting.

Specific Gravity - The comparable weight of different grades of crude oil. A lower number reflects a sweeter, lighter grade of crude oil more conducive to gasoline production.

Speculator - Industry or non-industry participant who eyes a futures or options profit by anticipating a future price movement or changing relationship. A speculator might purchase 30 Dec. heating oil contracts at 50cts gal when he judges that technical or fundamental factors are likely to drive the prices higher.

Spot - A deal for supply wherein the price is negotiated between the buyer and the seller, and the supply commitment varies.

Spot Margin - Additional funds required to be on hand as a contract approaches its delivery date. When a NYMEX contract becomes the "spot" month (the first month on the board), margin requirements are increased automatically by the NYMEX. They increase again some five days prior to the last trading day, with the intent of encouraging players to move out of the delivery month.

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. Also referred to as Cash Market.

Spot Price - The current value of any product on a volume basis.

Spread - In futures markets, applies to the difference between prices of futures contracts for different delivery months, or to the difference in prices for different commodities. Spread traders try to capitalize on likely fluctuations in these relationships, and initial spread margins are often considerably lower than for outright positions.

Squeeze - A trading situation where a lack of actual deliverable product exists. Traders who are short must buy back positions in a rapidly rising market.

Standard Industrial Classification (SIC) Code - A classification of establishments by type of activity in which they are engaged: for the purpose of facilitating the collection, tabulation, presentation and analysis of data relating to establishments (e.g. SIC 421 Trucking & Courier Services, Except Air).

Standard OPIS Display - Shows one price per product per supplier for all suppliers in that rack city. OPIS uses the primary terminal for suppliers with multiple terminals to avoid skewing the OPIS average for benchmarking purposes.

State of Domicile - The state in which the carrier maintains its headquarters.<