Commodities Now Glossary

Backwardation - A market condition in which a futures price is lower in the future delivery months than in the near delivery months. The opposite of contango.

Buenos Aires Grain Exchange (BAGE) - The Buenos Aires Grain Exchange is the oldest commercial institution in Argentina. On May 15, 1854, only one year after the Argentine Constitution was adopted, the Buenos Aires Grain Exchange began trading at the “Plaza de las Carretas”, currently known as “Plaza Miserere”

Balancing Authority (electric) - The responsible entity that integrates resource plans ahead of time, maintains load-interchange-generation balance within a Balancing Authority Area, and supports Interconnection frequency in real time. (NERC definition).

Banging the Close - A manipulative or disruptive trading practice where a trader buys or sells a large number of contracts during the closing period of a market(e.g., the period during which a futures settlement price is determined) in order to benefit an even larger position in an option, swap, or other derivative that is cash settled based on the futures settlement price on that day.

Bank for International Settlements - The BIS's mission is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.

Barclays Capital The investment banking division of Barclays Bank PLC employing 25,000 people worldwide with a highly specialised commodities division.

Barrel (bbl) - A unit of volume equal to 42 U.S. gallons

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 load - The minimum amount of electric power delivered or required over a given period of time at a steady rate

Basis Risk - Difference between a hedge's actual underlying reference point and the needed fundamental hedge. E.g. the basis for the Nord Pool market is the systems spot price. If, however, a power producer in the north of Sweden hedges his production (hedges his risk) by using system price based derivatives – he might encounter a basis risk. This is because there might be constraints in the transmission system – and hence the price he can sell his physical power at might not be the same as the systems price. (The system price might not be the same as the price in northern Sweden)

bbl (Barrel) - The abbreviation for barrel(s). A unit of volume equal to 42 U.S. gallons

bbl/d - The abbreviation for barrel(s) per day

bbl/sd - The abbreviation for barrel(s) per stream day

BBM (Bolsa Brasileira de Mercadorias) - The Brazilian Commodities Exchange is an educational, nonprofit organization with headquarters and jurisdiction in the Federal District. It carries its operations through a brokerage house linked to Central Regional Operations (CROs).

BBSB (Bolsa de Mercadoria de Brasília ) - Founded and headquartered in Brasília - DF in July 1993, the Commodities Exchange of Brasilia - BBSB is a nonprofit organization that aims to mediate and promote large scale marketing of products, services and assets.

Bcf - The abbreviation for billion cubic feet

Bear Spread - The term refers to selling the nearby contract month, and buying the deferred contract, to profit from a change in the price relationship

BELPEX - The Belgium Power Exchange - a leading contributor to the integration of the European electricity markets, accountable for delivering transparent price signals to its participants and the community. Belpex is focused on delivering electricity market services that bring value to its members and the entire Belgian electricity wholesale market. Belpex provides a trading platform for the negotiation of spot electricity trades and green certificates. Purchase/sale transacions are concluded directly, but anonymously, between the market participants.

Bi-fuel vehicle - A motor vehicle that operates on two different fuels, but not on a mixture of the fuels. Each fuel is stored in a separate tank.

Bilateral agreement - A written statement signed by two parties that specifies the terms for exchanging energy