(US) open-access same-time information system. Electronic information system that the Federal Energy Regulatory Commission requires all transmission operators to create or participate in to provide transmission customers with non-discriminatory information about available capacity, prices and other information.

    see on-the-day commodity market

    see one cancels the other

   an octane number or octane rating is a value used to indicate the resistance of a motor fuel to knock (ping). Octane numbers are based on a scale on which isooctane is 100 (minimal knock) and heptane is 0 (bad knock). For example, a gasoline with an octane number of 92 has the same knock as a mixture of 92% isooctane and 8% heptane.

   as typically used in wagering outcomes, the odds of success/winning are expressed in the form ‘r:s’ (‘r to s’) and correspond to the probability of succeeding/winning [P=s/(r+s)]. Therefore, given a probability P, the odds of succeeding/winning are (1/P)-1: 1.

   (Gas) mercaptan added to natural gas to give it smell so that gas escapes (leaks) can be detected.

   times of relatively low energy demand, typically nights and weekends.

   oil product or gas that does not meet specification. Refers either to contract specification or those benchmark specifications generally used in the physical market.

   matching two financial transactions on a regulated exchange with the same delivery, time and volume against one another to reduce financial obligations.

   (UK) gas removed from the national transmission system at reduced pressure.

    see refined products

   oil tanker freight derivatives are over-the-counter trades bought and sold in terms of worldscale prices and settled against 11 key tanker routes listed on the London-based Baltic Exchange. The worldscale system (worldwide tanker nominal freight scale) is a system of pricing tanker freight as a percentage of expected freight rates as published by the non-profit WorldScale Association in a table listing the price in dollars per tonne of oil for standard routes, and there is a flat rate for each route. Rates listed – flat rates – are termed WS100, which is the amount needed for a standard vessel to make a profit. Similarly, WS175 means 175% of the published rate.

   Compañía Operadora del Mercado Español de Electricidad (Omel) has been responsible for the organisation and regulation of the Spanish wholesale electricity pool since its launch in 1998.

   technologies and capabilities on liquefied natural gas (LNG) vessels for vaporisation of LNG after transport to its destination, in order to directly deliver natural gas to downstream markets.

   refers to hours of the business day when demand is at its peak. In the US, physical market, on-peak definitions vary by North American Electric Reliability Councils.

   part of the new gas trading arrangements introduced in the UK in October 1999, the OCM is a screen-based, within-day gas market that allows shippers to fine-tune their daily gas positions.

   where a broker is given two alternative orders. As soon as one is executed, the other order is cancelled.

   reliability standard often applied to electricity generation systems. Under this standard, a combination of forced and planned outages would leave the system without enough generation to meet load on a probabilistic basis on only one day in every 10 years.

   the highest gas demand expected in a single year out of 50 years. The UK gas pipeline system is designed to cope with this calculated level of demand.

   peak-day demand – the highest gas demand expected on any given day over a 20-year period. The UK gas network is designed to cope with this calculated level of demand.

   a model or description of a system where the model incorporates only one variable, or uncertainty – the future price.

    see digital option

   Vienna-based Organisation of Petroleum Exporting Countries. Opec members are: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, Venezuela and United Arab Emirates. Opec member states have two regular meetings a year, but may call further meetings if crude oil prices are significantly outside of Opec’s targeted levels. At the meetings, they may review both individual and group production quotas. Although Opec is a dominant force in international oil markets, growth in world demand for oil has at times pushed production to near-capacity limits, seemingly reducing Opec’s ability to contain oil prices below the cartel’s announced target range, which is intended to sustain world economic growth and limit development of substitute energy sources. This has been evident with the surge in crude oil prices in 2008, before prices collapsed due to the global economic downturn.

   the volume of contracts, long or short, open on an exchange-traded contract.

   trading by means of shouting bids and offers across a trading floor. This traditional method of trading is increasingly being replaced by electronic trading.

   the provision of electricity transmission to third parties on a non-discriminatory basis.

   the transportation of gas or electricity for third parties on a non-discriminatory basis.

   the risk that a firm’s internal practices, policies and systems are not adequate to prevent a loss being incurred, either because of market conditions or operational difficulties. Such deficiencies may arise from failure to measure or report risk correctly, or from a lack of controls over trading staff. Although operational risk is harder to define precisely than market or credit risk, it is considered by many to have been a contributor to some of the highly publicised losses of recent years.

   a contract that gives the purchaser the right, but not the obligation, to buy or sell the underlying commodity at a certain price (the exercise, or strike, price) on or before an agreed date. see also exotic option, vanilla option

    see futures option

   the amount that an option buyer pays to the seller.

    see replication

    see over-the-counter

   an option with no intrinsic value. For calls, an option with an exercise price above the market price of the underlying future. For puts, an option with an exercise price below the futures price. see also in-the-money

   a planned outage is the shutdown of a generating unit, transmission line, or other facility for inspection and maintenance, in accordance with an advance schedule. A forced outage is the unplanned loss of service of a generating unit, transmission line or other facility for purposes other than inspection and maintenance.

   probabilistically remote events that are often viewed as statistically independent as well. Various techniques can test if actual data differs in a statistically significant manner from the benchmark or normal distribution.

   an over-the-counter deal is a customised derivatives contract usually arranged with an intermediary such as a major bank or the trading wing of an energy major, as opposed to a standardised derivatives contract traded on an exchange. Swaps are the commonest form of OTC instrument.

   the gas taken from a pipeline to drive compressors or to preheat gas.

   a gasoline fuel additive containing hydrogen, carbon and oxygen. The oxygen content promotes more complete combustion of gasoline, which reduces exhaust emissions of carbon monoxide.