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Interconnector

A pipeline, transmission line, or other infrastructure physically connecting two distinct markets or regions (e.g., the UK–Belgium Interconnector for gas). Traders watch interconnector capacity and flows to exploit regional price differences. Read More

OCM (On-the-day Commodity Market)

A short‐term balancing market (particularly in the UK natural gas system) where shippers and the system operator trade gas to balance the network within a given gas day. Read More

Nom‐to‐Burn (N2B)

A type of short‐term physical transaction in natural gas markets where traders nominate volumes very close to real-time consumption needs (e.g., a power plant’s immediate gas burn). Read More

Line Pack

The volume of gas maintained within a pipeline system to ensure operational pressure and handle fluctuations. Managing line pack is critical in physical gas trading and pipeline operations. Read More

Capacity Release

A pipeline process whereby a shipper with firm transportation rights on a pipeline can release (sell or sub-lease) unused capacity to other shippers. This is common in regulated natural gas pipeline systems. Read More

LNG Regasification

The process of converting LNG (liquefied natural gas) back to gaseous form after receiving it at an import terminal. This step is essential to inject the gas into pipelines for distribution to end-users. Read More

Cargo Laycan

In LNG or crude oil shipping, the laycan is the date range during which a vessel must arrive at the loading port to load its cargo. If the vessel misses the laycan window, it can be refused loading. Read More

API Gravity

A measure of the density of crude oil as per the American Petroleum Institute. Traders often use API gravity to determine a crude’s quality and suitability for refining certain products. Read More

Liftings

In crude oil or LNG contexts, a “lifting” refers to the actual physical loading of cargo from a port or terminal onto a vessel. The term is also used in scheduling the sequence of cargo movements. Read More

Force Majeure

A contract clause allowing parties to suspend or terminate obligations due to unforeseeable events beyond their control (e.g., natural disasters, wars, pipeline failures). Physical energy markets rely on specific force majeure language because physical delivery can be interrupted by these events. Read More

Dark Spread / Spark Spread

These are common in electricity and fuels trading, reflecting the margin between the cost of the fuel input and the value of the electricity output. Spark Spread typically refers to gas-fired power (price of electricity minus cost of natural gas).Dark Spread is similarly calculated for coal-fired generation. Read More

Take-or-Pay

A contractual clause obligating the buyer to take (and pay for) a minimum contractually specified volume of product or pay as if the product had been taken, even if not physically delivered. Read More

Swing (or Swing Volume)

The optional or flexible portion of a longer-term physical contract, allowing a buyer or seller to adjust volumes (within defined limits) based on demand, often seen in natural gas and power contracts. Read More

Contango / Backwardation

Contango: Future prices are higher than the spot price, often incentivizing storage (e.g., storing oil in tankers to sell later).Backwardation: Future prices are lower than the spot price, often disincentivizing storage and encouraging immediate sale. Read More

Cash-Out

A mechanism used by grid or pipeline operators to settle imbalances. If a trader (or shipper) is long or short of physical volumes at the end of a trading period, the operator will “cash out” those imbalances at a penalty or specific settlement price. Read More

Nominations

In physical gas or crude oil trading, a “nomination” is the formal request or schedule that a shipper submits to a pipeline, storage facility, or terminal operator, detailing the volume of product to be transported, stored, or delivered over a given period. Read More

Basis Differential (or Basis Risk)

The price difference between a reference price (e.g., at a major hub like Henry Hub) and the actual physical delivery location. Traders must manage basis risk to account for local supply/demand dynamics, transport costs, and pipeline constraints. Read More

Balancing Mechanism (BM)

A system (frequently used in electricity markets) through which the grid operator balances the real-time supply and demand of energy. Market participants submit bids/offers to increase or decrease generation or consumption to keep the grid stable. Read More