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. Crack Spread

    The spread created in commodity markets by purchasing oil futures ...
  4. Sweet Crude

    A type of oil that meets certain content requirements, including ...
  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 Articles
  1. Oil And Gas Industry Primer
    Active Trading

    Oil And Gas Industry Primer

  2. Uncovering Oil And Gas Futures
    Active Trading

    Uncovering Oil And Gas Futures

  3. Commodity Prices And Currency Movements
    Forex Education

    Commodity Prices And Currency Movements

  4. Accounting For Differences In Oil And ...
    Fundamental Analysis

    Accounting For Differences In Oil And ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center