Nelson Index

AAA

DEFINITION of 'Nelson Index'

The Nelson Index is a measure of the complexity of an oil refinery. Refineries that are higher on the Nelson Index are valued higher relative to their peers. For example, high Nelson Index refineries may be able to refine lower quality crude oil, or be capable of producing higher value end products. Due to their greater complexity, high Nelson Index refineries are more costly to build and operate.

INVESTOPEDIA EXPLAINS 'Nelson Index'

The Nelson Index was developed in 1960 by Wilbur Nelson. Since the details of how a refinery operates are difficult to comprehend without specialized industry knowledge, the Nelson Index provides an easy metric for quantifying and ranking the complexity of different refineries. Based on the Nelson Index, on average, U.S. refineries are the most complex in the world. However, there are an increasing number of highly complex refineries located in other countries.

RELATED TERMS
  1. Oil Refinery

    An industrial plant that refines crude oil into petroleum products ...
  2. Crude Oil

    A naturally occurring, unrefined petroleum product composed of ...
  3. Sweet Crude

    A type of oil that meets certain content requirements, including ...
  4. Crack Spread

    The spread created in commodity markets by purchasing oil futures ...
  5. Sour Crude

    The name given to barrels of crude oil that do not meet certain ...
  6. 1979 energy crisis

    The 1979 energy crisis in the U.S. was an event of widespread ...
RELATED FAQS
  1. If oil producers run out of room to store oil, will the price of gasoline plummet?

    The price of gasoline would plummet if oil producers run out of room to store oil. However, running out of room to store ... Read Full Answer >>
  2. How can traders use contango to take advantage of the storage shortage for crude ...

    Traders with access to physical oil and storage can make substantial profits in a contango market. Other traders may seek ... Read Full Answer >>
  3. What other precious metals are there beyond gold and silver?

    Besides gold and silver, the other precious metals are platinum, palladium, ruthenium, rhodium, osmium, rhenium, germanium, ... Read Full Answer >>
  4. What countries have the largest gold reserves?

    The United States holds the largest stockpile of gold reserves in the world by a considerable margin. In fact, the U.S. government ... Read Full Answer >>
  5. What commodities are not tradable?

    As of February 2015, commodities that are not tradable include diamonds, tomatoes, carbon dioxide, lemons, eggs, potatoes, ... Read Full Answer >>
  6. How does the price of oil affect Venezuela's economy?

    The price of oil is one of the most heavily watched trends in economics, as it has an effect on the economies of every nation ... Read Full Answer >>
Related Articles
  1. Active Trading

    Oil And Gas Industry Primer

    Before jumping into this hot sector, learn how these companies make their money.
  2. Active Trading

    Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  3. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  4. Fundamental Analysis

    Accounting For Differences In Oil And Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.
  5. Budgeting

    Understanding Oil Industry Terminology

    The drillers are just one aspect of the oil & gas industry, and by knowing some details of their role, you'll be better suited to make investment decisions.
  6. Active Trading

    Unearth Profits In Oil Exploration And Production

    Drill down into financial statements to tap into the right companies and let returns flow.
  7. Investing Basics

    Explaining the Spot Rate

    The spot rate is the immediate purchase price posted on exchanges for purchasing commodities, currency and securities.
  8. Personal Finance

    Weak Oil, Sanctions' Bite, Mean Misery for Russia

    Low oil prices, coupled with crippling sanctions, will mean Russia will suffer declining growth and vicious inflation for at least the next two years.
  9. Forex Education

    For Now, a Future Without Putin Seems Unlikely

    Putin's actions have alienated the West and led to harsh economic sanctions against his country, but his favorability remains high at home.
  10. Chart Advisor

    Bullish Traders Are Turning To Rare Earth Metals

    Companies that explore and or process rare metals are of specific interest to traders because of strong moves in a couple of the sector’s key players.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center