A pricing assessment or pricing formula based on the effective price to the producer or seller at a specific location or defined point. For example, liquefied natural gas (LNG) netback prices may be determined by the market natural gas price at market destinations less the cost of pipeline transportation, regasification, waterborne shipping and liquefaction. Crude oil may be priced on the market value of its refined products, or natural gas priced based on the natural gas market price less the cost for delivering from the defined point to the market location.
Commodity trading and risk management is a subject that is necessarily complicated, and is becoming more so. The Energy Risk Glossary seeks to disentangle and clarify the jargon by providing definitions of commonly used energy and commodity market terms.
These include definitions related to a variety of underlying energy products, as well as technical terms about the many instruments and benchmarks used by energy market participants.
Many of the most recent terms to have been added to our glossary stem from the actions of regulators since the 2008 global financial crisis. The onset of rules, such as the US Dodd-Frank Act and European Market Infrastructure Regulation, has markedly increased the cost and complexity associated with commodity trading. Perhaps they have also increased the need for a handy reference guide such as this.
The glossary is extensively cross-referenced, making for easy and thorough searches. We hope you find the latest edition of the Energy Risk Glossary to be a useful resource.
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