Market Terms

Demurrage – Charge assessed by the carrier for delays during the delivery that are beyond the control of the carrier. (Charges for “wait time”).

FTL – FTL shipping stands for full truckload, meaning that the shipment will take up an entire truck by itself. FTL shipments stay on the same truck the entire time and aren’t transferred during transport.

LTL – LTL shipping stands for less than truckload, meaning that the shipment will not take up an entire truck, you only pay for the space in the truck that you need.

Mobile Refuel – Also known as wet hosing, fleet fueling, wheel to wheel. A third party carrier that is capable of fueling fleet vehicles directly from its transport fuel truck. Deliveries are usually much smaller than full loads.

Pump Charges – Charges levied by the hauler to pump product into above ground tanks.

Pump Truck – Truck with pump mechanism which allows it to pump fuel into above ground storage tanks.

Split Delivery – A delivery where the carrier delivers fuel to multiple destinations.

Split Load – Carrier obtains product from separate supplier terminals for a single delivery (ex. Chevron terminal in Doraville for Diesel and the Motiva terminal in Doraville for gasoline.)

Tanker – Large transport trucks (>6,000 gallons) used in the delivery of fuel trucks from the terminal to the final destination.

Tank Wagon – Smaller transport trucks (<6,000 gallons) used in the delivery of fuel from the terminal to the final destination. Tank Wagons are often used for sites with smaller or difficult to reach tanks.

Batch – Pipelines transport different types of liquid petroleum in the same pipeline. To do so, the pipeline operator sends different products in “batches”. For example, an operator might send gasoline for several hours, and then switch to jet fuels, before switching to diesel fuel.

Biomass – Biomass is an industry term for getting energy by burning wood, and other organic matter. It is the building block to creating crude oil.

Blending – Mixing of products of different grades.

Boutique fuels – Boutique fuels are state motor fuels that have been specially formulated for use in a particular region to help the region meet its local air quality requirements.

Branded Gasoline – Gasoline sold under a refiner’s trademark (i.e. Citgo, Shell, BP). Benefits of branded product include additive, reduced price volatility and guaranteed supply. Branded product can be sold to unbranded locations under certain circumstances.

Biodiesel – Biodiesel refers to a vegetable oil or animal fat-based diesel fuel consisting of long-chain alkyl esters. Biodiesel is typically made by chemically reacting lipids with an alcohol producing fatty acid esters.

Cloud Point – Cloud point is the temperature below which wax in diesel forms a cloudy appearance. Waxes thicken the oil and clogs fuel filters and injectors in engines.

CNG – Compressed Natural Gas. CNG is a fossil fuel substitute for gasoline (petrol), diesel, or propane/LPG. Although its combustion does produce greenhouse gases, it is a more environmentally clean alternative to those fuels and is much safer than other fuels in the event of a spill. CNG is made by compressing natural gas (which is mainly composed of methane [CH4]) to less than 1% of the volume it occupies at standard atmospheric pressure. It is stored and distributed in hard containers at a pressure of 200–248 bar (2900–3600 psi), usually in cylindrical or spherical shapes.

Conversion – In the process of conversion, heavier molecules in crude can be converted, or “cracked,” into the lighter products for which there is higher demand.

D-975 – This specification covers seven grades of diesel fuel oils suitable for various types of diesel engines.

DEF – Diesel Exhaust Fluid. DEF is a carefully blended aqueous urea solution of 32.5% high purity urea and 67.5% deionized water. This fluid is added to a separate compartment in diesel burning engines to reduce oxides from nitrogen emitted from engines causing air pollution.

Distillates – These are light fuel oils used in diesel engines (including railroad engine fuel and fuel for agricultural machinery), heating homes and electric power generation.

Downstream – Refining and marketing processes are considered to be downstream, versus drilling and production that are considered to be upstream.

Ethanol – Alcohol derived from vegetable matter (usually corn) added to gasoline to produce cleaner burning fuel.

Feedstocks – Raw material (input) fed into the conversion process resulting in something different (output). Crude oil is a feedstock in the refining process which produces gasoline (petroleum).

Gross Gallons – Measurement in U.S. gallons without temperature or barometric adjustments. More information on net verses gross gallons

Heavy and Light Crude Oil – Crude can be classified as “light” or “heavy,” a characteristic which refers to the oil’s relative density based on the American Petroleum Institute (API) Gravity. This measurement reflects how light or heavy a crude oil is compared to water. If an oil’s API Gravity is greater than 10, it is lighter than water and will float. If an oil’s API Gravity is less than 10, it is heavier than water and will sink.

High Sulfur Diesel – Diesel containing more than 500 PPM sulfur content and can only be used off-road. HSD is taxed at a lower rate than low sulfur diesel. HSD is illegal for vehicle use in some parts of the country (see NEMA) and can only be sold as “heating oil”.

Hydraulic Fracturing – Hydraulic fracturing is a well stimulation technique in which rock is fractured by a pressurized liquid.

LNG – Liquefied Natural Gas. LNG is a product of natural gas which consists primarily of methane; its critical temperature is about -100°F (-73°C), and thus it must be liquefied by cooling to cryogenic temperatures and must be well insulated to be held in the liquid state.

Low Sulfur Diesel – Diesel with reduced sulfur content (less than 500 PPM). The traditional “diesel fuel”. Low Sulfur Diesel can be tax free in certain circumstances such as dyed.

MSDS – (Material Safety Data Sheet) This itemizes the chemical constituents, fire and health hazards and emergency response procedures for a given product.

Natural Gas – A naturally occurring fuel requiring minimum refining compared to crude. Liquefied natural gas (LNG) and compressed natural gas (CNG) are rated to be among the cleanest of fossil fuels.

Net Gallons – Measurement in U.S. gallons with temperature and barometric adjustments. Gallons normalized to 60 degrees Fahrenheit. More information on net verses gross gallons.

Octane – Rating used to measure gasoline’s ability to resist premature detonation which causes an engine to knock. The higher the octane, the greater the resistance.

Oxygenated – Fuels required by the EPA to have higher levels of oxygen in order to reduce carbon monoxide emissions in winter months.

Pour Point – Pour point is the minimum temperature at which a lubricants turns into semi solid and almost loss its flow characteristics.

Purification – The final process of refining, and includes combining processed products to create various octane levels, vapor pressure properties, and special properties for products used in extreme environments.

RBOB – From an investment standpoint, the terms “petrol” or “gasoline” refer to Reformulated Gasoline Blendstock for Oxygen Blending (RBOB), which is simply the term given to unleaded gas futures.

Refined Petroleum Products – Products that come out of the distillation process of crude oil such as diesel, gasoline, jet fuel and asphalt.

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

Retail – Commonly known as gas stations. Generally dealing with transactions of the size of 10 to 150 gallons.

RFG – (Reformulated Gas) Gasoline blended to burn cleaner and reduce smog-forming and toxic pollutants.

RINs – Renewable Identification Numbers (RINs) are the mechanism for insuring the prescribed levels of blending are reached. The U.S. Environmental Protection Agency (EPA) is responsible for overseeing and enforcing blending mandates and developing regulations for RINs.

RVP – Reid Vapor Pressure. Used to measure pressure in terms of pounds per square inch (psi) such as 9.0 or 7.8 psi. Lower RVP’s are often required in summer months.

SCR Technology – Selective Catalytic Reduction (SCR) is an advanced active emissions control technology system that injects DEF through a special catalyst into the exhaust stream of a diesel engine. The DEF sets off a chemical reaction converting nitrogen oxides into nitrogen, water, tiny amounts of carbon dioxide (CO2) and natural components of the air we breathe, which is then expelled through the vehicle tailpipe.

Separation – Separation refers to the process of distillation. Crude oil is heated in a furnace so hydrocarbons can be separated via their boiling point.

Spill Containment – Spills of chemicals, oils, sewage etc. are contained within a barrier or drainage system rather than being absorbed at the surface.

Sweet and Sour Crude Oil – Petroleum containing higher levels of sulfur is called sour crude oil. Sweet crude oil contains small amounts of hydrogen sulfide and carbon dioxide.

Transmix – Transmix is a mixture of refined products that forms when transported in pipelines. This mixture is typically a combination of gasoline, diesel, and/or jet fuel. Transmix processing plants use distillation to separate the products. These distillation products are further treated to form usable gasoline and diesel.

Turn Around – Originally, the term was applied to the periodic inspection and maintenance of an oil refinery. It now applies to any shutdown, slowdown or operational problem brought upon by refinery maintenance. Turnarounds are both “planned” and “unplanned”.

UCC Systems – Universal commercial code (UCC) is a set of laws that provide legal rules and regulations governing business dealings to unify transactions across different states.

Unbranded Gasoline – Gasoline that is not sold under a refiner’s trademark. Unbranded gasoline cannot be sold to a branded retail location.

Un-denatured – A change in the usual nature of a substance or the change in the physical properties of a substance.

Upstream – Term applying to functions or facilities close to the wellhead. Drilling and production are generally upstream processes in the oil patch while refining and marketing are downstream.

Vapor Recovery – The process of recovering the vapors of gasoline or other fuels so they do not escape into the atmosphere. This is often done (or required by law) at filling stations in order to reduce noxious and potentially explosive fumes and pollution.

AST – Above Ground Storage Tank. An AST is a tank physically located above ground. Requires pump (either owned by the customer or carried on a Pump Truck) in order to receive fuel deliveries.

ATG – Automatic tank gauging, an electronic device that its basic function is to monitor the fuel level in the tank over a period of time to monitor if the tank is leaking. It can also tell the facility operator what is going on inside the tank (fuel level, volume and temperature, water level and volume, high and low fuel level warnings).

Coker Unit – A coker or coker unit is an oil refinery processing unit that converts the residual oil from the vacuum distillation column into low molecular weight hydrocarbon gases, naphtha, light and heavy gas oils, and petroleum coke.

Commingled Tanks – When gas is commingled in transportation pipelines all the gas meets the same gas specification and it is the energy value of the gas that is critical rather than its composition. Shippers are not interested in which molecules of gas they get re-delivered to them from the pipeline as long as they get back the same amount of energy that they delivered into the pipeline.

Cracker Unit – Cracker units are facilities in which a feedstock such as naphtha, liquefied petroleum gas (LPG), ethane, propane or butane is thermally cracked through the use of steam in a bank of pyrolysis furnaces to produce lighter hydrocarbons.

Distillation Tower – Crude oil is first heated then put into a distillation tower where different products boil off and are recovered at different temperatures. Lighter products are recovered at the lowest temperatures. The heaviest products such as residual fuel oil are recovered at temperatures sometimes over 1,000 degrees Fahrenheit.

Maximum Fuel Level – Level equal to 90% of Total Tankage. Fuel levels beyond the maximum fuel level increase the risk of spills and can damage certain tank monitoring equipment.

Minimum Fuel Level – Level equal to 10% of Total Tankage. Fuel levels below the minimum fuel level create stress on tank pumps and can lead to pump failure.

Tank Overfill – Occurs legally when tank is filled 90% or above Total Tankage. Actual overfill occurs when tank is greater than or equal to 95% of Total Tankage.

Total Tankage – The actual size of a customer tank at full capacity.

Ullage – The unfilled space in a tank. Mansfield does not consider the top 10% in our tank capacity calculation, so we consider ullage to be the amount between the current tank level and the maximum tank level.

UST – Underground Storage Tank. An UST is a tank physically located below ground. Fuel can be dropped into a UST without the use of a pump.

ASTM – International standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems and services.

ASTM D6751 – ASTM specification for biodiesel.

API – American Petroleum Institute. Compiles industry statistics reflecting market inventory fluctuations, refining yield and capacity changes, import changes and production moves.

Barrel – A unit of measurement for crude oil and oil products equal to 42 U.S. gallons.

CAFE – The Corporate Average Fuel Economy (CAFE) standards are regulations in the United States to improve the average fuel economy of cars and light trucks produced for sale in the United States.

Colonial Pipeline – Colonial pipeline is the largest U.S. refined products pipeline system and can carry more than 3 million barrels of gasoline, diesel and jet fuel between the U.S. Gulf Coast and the New York Harbor area.

Consignment – Agreement to pay a supplier of goods after the goods are sold.

DOE – Department of Energy. Similar to API, the DOE publishes weekly industry inventory statistics usually released on Wednesday mornings. API provides estimates while the DOE reports actual levels.

EPA – Environmental Protection Agency. Federal Agency that implements and enforces environmental regulations.

FOB – Free on Board. FOB is used to denote deliveries where the buyer arranges for the shipping and there is a delivery and change of title at the time the cargo is loaded.

Fungible – The property of a refined product whose individual units are essentially interchangeable.

Futures Contract – An agreement traded on an organized exchange to buy or sell assets, especially commodities or shares, at a fixed price but to be delivered and paid for later.

Gross Weight Limits – The gross vehicle weight rating (GVWR), or gross vehicle mass (GVM) is the maximum operating weight/mass of a vehicle as specified by the manufacturer including the vehicle’s chassis, body, engine, engine fluids, fuel, accessories, driver, passengers and cargo but excluding that of any trailers.

Grounded/Scully System – Safety monitoring system for overfill prevention, grounding, and vehicle identification safety at bottom and top-loading terminals.

Horizontal Drilling – The process of drilling a well from the surface to a subsurface location just above the target oil or gas reservoir called the “kickoff point”, then deviating the well bore from the vertical plane around a curve to intersect the reservoir at the “entry point” with a near-horizontal inclination, and remaining within the reservoir until the desired bottom hole location is reached.

Jobber – A fuel middleman. Jobbers buy fuel from the major refiners and sell to end users. Jobbers often (but not always) own their own trucks.

LCR – Least cost routing.

Major – Classification given to the large fuel firms including players such as BP Amoco, Citgo, ConocoPhillips, ExxonMobil and Flint Hills.

NYMEX – New York Mercantile Exchange. The only domestic commodity exchange that trades energy futures contracts.

OPEC – Organization of Petroleum Exporting Countries. Cartel controlling a significant share of world petroleum and coordinates production in order to optimize fuel prices.

PADDs – The Petroleum Administration for Defense Districts (PADDs) are geographic aggregations of the 50 States and the District of Columbia into five districts: PADD 1 is the East Coast, PADD 2 the Midwest, PADD 3 the Gulf Coast, PADD 4 the Rocky Mountain Region, and PADD 5 the West Coast. Due to its large population, PADD 1 is further divided into sub-PADDs with PADD 1A as New England, PADD 1B the Central Atlantic States, and PADD 1C comprising the Lower Atlantic States.

Plantation Pipeline – The Plantation pipeline parallels the path of Colonial Pipeline and many terminals along the route can receive products from either pipeline.

Refiner – Firm which converts raw crude oil into refined products such as gasoline and diesel.

Reseller – A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit (but could be resold at a loss).

Scheduling – The process of tracking the customer’s batch or product through the pipeline is done through scheduling. Once the product has been scheduled and actually transported, a ticket is written that shows the type of product transported, the amount, transportation origination and destination points, and the owner.

Speculation – Speculation is the purchase of an asset with the hope it will become more valuable at a future date.

Adder – Price adjustment to an OPIS, Platts, or other index figure (ex. OPIS Average – 50 pts.)

Argus – A company providing a pricing index (like Platts).

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.

Backwardation – When future prices are estimated to be lower than current (prompt month) prices.

Crack Spread – Difference between crude and refined product prices.

Fixed Price – A price established by a contract and not subject to subsequent change.

Fuel Surcharge – An extra fee charged by trucking companies (or third parties) to cover the fluctuating cost of fuel. It is calculated as a percentage of base rate and is usually added to a shipper’s freight bill to cover the cost of operations.

HO – NYMEX futures contract was previously known as heating oil and as such still trades under the symbol HO.

Inverted Market – When the cost of branded fuel is less expensive than the cost of unbranded fuel for the same product within the same terminal.

Netback – The total cost connected to bringing crude oil to the marketplace and the revenues from all the products generated from it. This term only applies to companies who are oil suppliers.

OPIS – Oil Pricing Index Service. Provides industry various price indices (daily, weekly, AM, etc.) that are derived from supplier’s published or rack prices.

OPIS AM – OPIS index of suppliers’ published rack prices as of 10 AM each business day.

OPIS Average – OPIS index showing the average supplier Rack Price for a given product in a specific terminal city.

OPIS Branded – OPIS index of suppliers’ published rack prices that consists of prices for branded products only.

OPIS Contract – The 10 AM morning OPIS feed of benchmark data.

OPIS Gross – OPIS index where discounts for early payments to the supplier are excluded from the OPIS price.

OPIS Low – OPIS index showing the lowest supplier rack price for a given product in a specific terminal city.

OPIS Net – OPIS index where discounts for early payments to the supplier are included from the OPIS price.

OPIS Price – Price to the end customer based on one of the OPIS price indices.

OPIS Unbranded – OPIS index of suppliers’ published rack prices that excludes prices for branded products.

PLATTS – An energy information firm that publishes pricing indices based upon current trading market conditions (i.e. NYMEX, Gulf Coast, etc.)

Point – 1/100th of a cent ($0.0001).

Rack Price – Sometimes referred to as the “Spot” price. The supplier’s published price that is available to all customers.

Spot price – Current price in the marketplace at which a given asset—such as a security, commodity, or currency—can be bought or sold for immediate delivery.

STEO – Short-Term Energy Outlook. A report produced monthly by the EIA providing price forecasts based on historical data and current market conditions.

Tariff – Tariffs are used to restrict imports by increasing the price of goods and services purchased from overseas and making them less attractive to consumers.

Verticals – A vertical market is a market in which vendors offer goods and services specific to an industry, trade, profession, or other group of customers with specialized needs. An example could be software that manages services in hotels—amenities solutions.

WTI – West Texas Intermediate (WTI), also known as Texas light sweet, is a grade of crude oil used as a benchmark in oil pricing. This grade is described as light because of its relatively low density, and sweet because of its low sulfur content. It is the underlying commodity of New York Mercantile Exchange’s oil futures contracts.

Bill of Lading – Document that serves as a receipt from the supplier to the purchaser.

Driver Cards – Card assigned to each driver and used at the loading rack to designate which driver pulled the product.

Loading Cards – Cards used by carriers at the rack to identify the purchaser of the fuel from the supplier.

Loading Rack – The area within the tank storage facility where fuel is dispensed into the tanker or tank wagon.

Rack – Another name for terminal.

Supplier – The owner of the fuel at a specified terminal (Citgo @ the Kinder Morgan terminal, BP @ the BP terminal).

Terminal – 1. The tank store facility where product can be obtained (ex. Kinder Morgan terminal, Citgo terminal, Chevron Terminal, etc.) 2. The city in which tank storage facilities are located (ex. the Doraville terminal)