PETRAL LEARN / ALL TOPICS
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Find a concept, follow a domain, or look up a term. Each guide explains what the idea means and how it shows up on the desk.
BROWSE THE LIBRARY
11 domains · 77 topicsTopics by domain
01
Crude markets
The overview: interchangeable barrels, two trading layers, and where a price comes from.
- 01Physical and paper marketsCargoes that move, against contracts that mostly do not.
- 02Futures contractsStandardised promises to deliver, and why most never do.
- 03Hedgers and speculatorsWho is in the market, and which risk each of them is trying to move.
- 04Settlement pricesThe official daily print, how it is struck, and why it is not the last trade.
- 05LiquidityHow much you can trade before you move the price, and where it hides.
- 06Contract specs and expiryThe fine print that decides which month you are actually trading.
02
Curve and time
Every delivery month at once, and what its shape says about the present.
- 01ContangoDeferred above prompt, and the storage trade that puts a ceiling on it.
- 02BackwardationPrompt above deferred: the market paying up for a barrel now.
- 03Storage and carryThe physical cost that anchors the whole curve.
- 04SpreadsTrading the relationship instead of the level.
- 05Roll yieldWhat maintaining a position costs, before the price does anything.
- 06Fitting the curveWhy a smooth line is drawn through the settlements, and what it hides.
03
Benchmarks and pricing
How a handful of reference grades ends up pricing hundreds of real cargoes.
- 01WTI and BrentTwo benchmarks, two mechanisms, and what their spread actually measures.
- 02Grade differentialsWhat a specific barrel in a specific place is worth against its reference.
- 03Assessed pricesPrices produced by judgement over observed deals, and how that differs from a settlement.
- 04Dubai and the EastThe benchmark that prices the largest crude trade route in the world.
- 05Quality adjustmentsAPI gravity, sulphur, and how a differential is built from a spec sheet.
- 06Delivery pointsWhy where a contract delivers can matter more than what it delivers.
- 07Henry Hub, TTF and the LNG linkThe two gas benchmarks, why they sit so far apart, and what connects them.
04
Refining and products
Crude is an input. The margin between it and its products is what drives demand for it.
- 01Crack spreadsThe tradeable proxy for a refining margin, and the ways it is not one.
- 02Refinery runsHow much crude is actually being processed, and what makes it change.
- 03Product yieldsWhat a barrel actually becomes, and why the proportions are not free.
- 04Margins versus cracksThe gap between the tradeable index and the money a refinery actually makes.
- 05Product specificationsThe rules that decide whether a barrel of output is a product or a problem.
- 06Turnarounds and outagesMaintenance seasonality, and the difference between planned and unplanned.
05
Supply, demand and balance
The identity everything is measured against, and why it never quite closes.
- 01OPEC and quotasA producer group that manages output, and why measuring its compliance is harder than it looks.
- 02Spare capacityThe market's shock absorber, and the reason the same disruption can matter or not.
- 03US shaleThe fastest-responding large supply source, and what its response actually looks like.
- 04Non-OPEC supplyThe rest of the world's production, and why it behaves differently.
- 05Demand seasonalityThe shape of a normal year, and why it swamps the growth rate.
- 06Demand destructionPrice-induced demand loss, and why it is nearly invisible while it happens.
06
Inventories and storage
Stocks are the market's memory of every past imbalance.
- 01CushingOne tank farm in Oklahoma, and why the market watches it so closely.
- 02Days of coverStocks normalised by demand, and why the raw level misleads.
- 03Strategic petroleum reservesState-held stocks, why they are not commercial inventory, and what a release actually does.
- 04Floating storageWhen the curve pays enough to keep barrels at sea.
- 05Product storage hubsARA, Singapore and Fujairah, and why product stocks are read differently.
- 06Natural gas storageThe Thursday storage print, the injection season, and why gas stocks swing far harder than crude.
07
Freight and shipping
A barrel priced in one place is worth something else in another. Freight is the difference.
- 01WorldscaleWhy tanker rates are quoted as a percentage of something you have never heard of.
- 02Time charter equivalentTurning a voyage rate into the daily earning an owner actually compares.
- 03Vessel classesWhy size picks the route, and why the segments do not substitute freely.
- 04ChokepointsA handful of narrow passages through which most seaborne crude must pass.
- 05Freight-adjusted arbitrageThe landed-cost calculation that decides where a cargo actually goes.
- 06BunkersThe fuel a ship burns: the largest variable voyage cost, and a product market of its own.
08
China
The largest importer, the least transparent major participant, and why both facts matter.
- 01Teapot refineriesThe independent refining sector, and why it is the market's most price-sensitive buyer.
- 02China's strategic reservesUnpublished state stockpiling, and how the market infers what it cannot see.
- 03Crude importsThe best-measured Chinese series, and what it can and cannot tell you.
- 04Product export quotasAn administrative permission system sitting where an arbitrage would otherwise be.
- 05What China publishesWhich series exist, which do not, and why the gap is structural rather than fixable.
09
Volatility and options
Not where price goes, but how much it moves on the way.
- 01Realised volatilityMeasuring how much price actually moved, and the choices that measurement conceals.
- 02Implied volatilityThe volatility number backed out of an option price, and what it is really quoting.
- 03The volatility surfaceImplied volatility across strike and expiry, and the two shapes that matter.
- 04Vol term structure and the coneHow implied volatility varies with expiry, and how to tell whether a level is unusual.
- 05The greeksWhat an option position is actually exposed to, and why petral does not compute them.
10
Quant and statistics
What a descriptive statistic can honestly tell a desk, and what it cannot.
- 01Z-scores done honestlyStandardisation, and the guard that stops it inventing a signal.
- 02Correlation and spurious regressionWhy regressing two oil series in levels produces relationships that do not exist.
- 03Curve factorsReducing a whole curve to level, slope and curvature, and the gate that says whether it worked.
- 04Move attributionDecomposing today's move into named drivers, and what the residual means.
- 05Hedge ratios and basis riskHow much of one thing to sell against another, and the risk that remains.
- 06Robust statisticsWhy the biggest divergences understate themselves, and the estimator that fixes it.
11
Data and provenance
Every number has a source, a lag and a reliability. Most tools show you none of the three.
- 01The weekly inventory printThe market's most traded data release, and what it actually measures.
- 02Positioning reportsA weekly census of who holds what, with a structural lag.
- 03RevisionsA first print is a draft, and the market usually trades the draft.
- 04Live, cached, sampleWhere a number on screen actually came from, this second.
- 05Reliability tiersFour words for how well a number is actually observed.
- 06Composite provenanceWhat happens to reliability when you combine two numbers.
- 07How a survey is builtSampling, response rates and the balancing item, underneath every official number.
REFERENCE
Glossary
Short definitions of desk terms.
- Aframax
- Tanker class carrying roughly 750,000 barrels. Named after a freight rate scale, not a physical limit.
- API gravity
- Inverse density scale for crude. Higher is lighter. Water is 10.
- ARA
- Amsterdam-Rotterdam-Antwerp, northwest Europe's product storage and blending hub.
- Assessed price
- A published estimate of a physical market price, based on observed deals, bids and offers rather than an exchange settlement.
- Attribution
- Breaking a price move into named drivers and an unexplained remainder.
- Backwardation
- A forward curve where nearby delivery costs more than later delivery.
- Balancing item
- The published residual that makes supply, demand and stocks reconcile. A statement of measurement error.
- Ballast leg
- The empty return voyage. Earns nothing and still consumes days in the TCE denominator.
- Barrel
- 42 US gallons. The standard volume unit for crude and most product pricing.
- Basis risk
- The variability left in a hedged position after hedging. What a minimum-variance hedge minimises but does not remove.
- Benchmark
- A widely traded reference grade against which other crudes are priced at a differential.
- Bunkers
- The fuel a ship burns. The largest variable cost of a voyage.
- CACHED
- Retrieval mode: the value came from a stored copy, with its age reported, not a fresh fetch.
- Carry
- The full cost of holding a barrel between two dates: tank rental, insurance and financing.
- Chokepoint
- A narrow shipping passage where disruption can delay cargoes and raise voyage costs.
- Cointegration
- A long-run relationship between series that individually wander. Tested for, never assumed.
- Coker
- The deepest upgrading unit. Breaks heavy residue into lighter products and solid coke.
- Contango
- A forward curve where later delivery costs more than nearby delivery.
- Convenience yield
- The value of holding the physical barrel rather than a claim on it. What backwardation prices.
- Crack spread
- The price difference between refined products and the crude used to make them; a rough proxy for refining margin.
- Curvature
- The third curve factor: the middle of the curve moving against both ends.
- Cushing
- The Oklahoma tank farm that is the WTI delivery point.
- Days of cover
- Inventory divided by daily demand: how long stocks would last at the current consumption rate.
- Delivery point
- The place where a physical or futures contract says the commodity must be delivered.
- Delta
- An option's sensitivity to the underlying price, and loosely the equivalent futures position it represents.
- Demand destruction
- A reduction in consumption caused by prices high enough to change behaviour or make use uneconomic.
- Differential
- The premium or discount of a specific grade or location relative to a benchmark price.
- DUC
- Drilled but uncompleted well. A backlog that lets production rise without new drilling.
- Estimate
- Reliability tier: modelled or inferred, with no direct observation behind it.
- Floating storage
- Keeping oil on a tanker instead of delivering it, usually when the forward price covers the holding cost.
- Forward curve
- The prices for the same commodity across different future delivery dates.
- Futures contract
- A standardised exchange-traded agreement for a specified commodity, quantity and delivery month.
- Gamma
- The rate at which delta changes. What makes an options position non-linear.
- Heating degree day
- Population-weighted departure of temperature below a comfort baseline. Quantifies heating demand.
- Hedger
- A participant who trades to reduce price risk they already have from producing, buying or using oil.
- Implied volatility
- The volatility level backed out of an option's market price.
- Imputation
- Filling a survey non-response with a modelled value. Why a published figure is part measurement, part model.
- Liquidity
- How much can be traded without moving the price. Concentrates in front-month benchmark contracts.
- LIVE
- Retrieval mode: fetched from the upstream source on this request.
- MAD
- Median absolute deviation. Times 1.4826 it estimates sd robustly, with a 50 percent breakdown point.
- Nelson-Siegel
- A four-parameter curve family: level, slope, curvature and a decay term.
- Official
- Reliability tier: published by a statistical agency or recognised assessor. Documented, and an estimate.
- Open interest
- Contracts outstanding. Rising open interest on a move means new positions, not just closing ones.
- OSP
- Official selling price. A producer's own monthly differential for term contracts, announced not negotiated.
- PADD
- US Petroleum Administration for Defense District. The regional unit US refining data is reported in.
- Physical market
- Trade in actual cargoes, with a grade, loading window and delivery point agreed between counterparties.
- Proxy
- Reliability tier: a series standing in for the quantity actually wanted. Cannot exist without a proxy note.
- Realised volatility
- A measure of how much a price actually moved over a chosen past window.
- Refinery runs
- The amount of crude a refinery processes over a period.
- Revision
- A later correction to a published figure. Why a first print is a draft.
- Roll yield
- The gain or cost from replacing an expiring futures contract with a later one to keep exposure.
- SAMPLE
- Retrieval mode: deterministically generated fixture data, because no source was reachable.
- Settlement price
- The exchange's official daily reference price, used to mark futures positions and calculate margin.
- Skew
- How implied volatility varies with strike. A map of where hedging demand sits, not a directional forecast.
- Slope
- The second curve factor: front and back moving in opposite directions. What a calendar spread captures.
- Spare capacity
- Production that could be brought online relatively quickly and sustained when supply is disrupted.
- Speculator
- A participant with no physical exposure, trading to profit from price changes and supplying the other side of hedges.
- SPR
- Strategic petroleum reserve. State-held crude on a policy rule, not commercial inventory.
- Spread
- The price difference between two related contracts, grades, places or delivery dates.
- SSVI
- A parametric volatility surface family that is arbitrage-free by construction.
- Storage
- Holding physical oil between purchase and sale; the cost includes space, financing and insurance.
- Suezmax
- The largest tanker that can transit the Suez Canal fully laden, around one million barrels.
- TCE
- Time charter equivalent. Voyage revenue less voyage costs, divided by total days including ballast.
- Teapot refinery
- An independent Chinese refinery, typically smaller than a state-owned plant and sensitive to margins and import access.
- Theta
- The loss of an option's value as time passes. The cost of owning optionality.
- Tonne-mile
- Volume times distance. Rises when trade routes lengthen even if volume is flat.
- Turnaround
- Planned refinery maintenance shutdown. Clusters in spring and autumn for economic reasons.
- Utilisation
- Refinery runs as a percentage of nameplate capacity. A measured numerator over an administrative denominator.
- Variance risk premium
- The systematic gap between implied and subsequently realised volatility. A premium, not a forecast error.
- Vega
- An option's sensitivity to implied volatility.
- VLCC
- Very large crude carrier, around two million barrels. The workhorse of long-haul crude trade.
- Worldscale
- Tanker freight quoted as a percentage of a published route-specific notional flat rate.
- Yield
- The share of a processed crude barrel that becomes a particular refined product.
- Z-score
- A value expressed in standard deviations from its own mean. Needs a scale-relative dispersion guard.