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DERIVATIVES
 9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
The Company uses derivative instruments to mitigate certain exposures to commodity price risk. The Company entered into Inventory Intermediation Agreements that contain purchase obligations for certain volumes of crude oil, intermediates and refined products. The purchase obligations related to crude oil, intermediates and refined products under these agreements are derivative instruments that have been designated as fair value hedges in order to hedge the commodity price volatility of certain refinery inventory. The fair value of these purchase obligation derivatives is based on market prices of the underlying crude oil, intermediates and refined products. The level of activity for these derivatives is based on the level of operating inventories.
As of September 30, 2019, there were 200,894 barrels of crude oil and feedstocks (no barrels at December 31, 2018) outstanding under these derivative instruments designated as fair value hedges. As of September 30, 2019, there were 2,851,543 barrels of intermediates and refined products (3,350,166 barrels at December 31, 2018) outstanding under these derivative instruments designated as fair value hedges. These volumes represent the notional value of the contract.
The Company also enters into economic hedges primarily consisting of commodity derivative contracts that are not designated as hedges and are used to manage price volatility in certain crude oil and feedstock inventories as well as crude oil, feedstock, and refined product sales or purchases. The objective in entering into economic hedges is consistent with the objectives discussed above for fair value hedges. As of September 30, 2019, there were 3,997,000 barrels of crude oil and 4,500,000 barrels of refined products (5,801,000 and 1,609,000, respectively, as of December 31, 2018), outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.
The following tables provide information about the fair values of these derivative instruments as of September 30, 2019 and December 31, 2018 and the line items in the Condensed Consolidated Balance Sheets in which the fair values are reflected.
Description

Balance Sheet Location
Fair Value
Asset/(Liability)
 
 
(in millions)
Derivatives designated as hedging instruments:
 
 
September 30, 2019:
 
 
Derivatives included with the inventory intermediation agreement obligations
Accrued expenses
$
12.7

December 31, 2018:
 
 
Derivatives included with the inventory intermediation agreement obligations
Accrued expenses
$
24.1

 
 
 
Derivatives not designated as hedging instruments:
 
 
September 30, 2019:
 
 
Commodity contracts
Accounts receivable
$
2.6

December 31, 2018:
 
 
Commodity contracts
Accounts receivable
$
7.2


The following table provides information about the gains or losses recognized in income on these derivative instruments and the line items in the Condensed Consolidated Statements of Operations in which such gains and losses are reflected.
Description
Location of Gain or (Loss) Recognized in
 Income on Derivatives
Gain or (Loss)
Recognized in
Income on Derivatives
 
 
(in millions)
Derivatives designated as hedging instruments:
 
 
For the three months ended September 30, 2019:
 
 
Derivatives included with the inventory intermediation agreement obligations
Cost of products and other
$
23.6

For the three months ended September 30, 2018:
 
 
Derivatives included with the inventory intermediation agreement obligations
Cost of products and other
$
(8.2
)
For the nine months ended September 30, 2019:
 
 
Derivatives included with the inventory intermediation agreement obligations
Cost of products and other
$
(11.4
)
For the nine months ended September 30, 2018:
 
 
Derivatives included with the inventory intermediation agreement obligations
Cost of products and other
$
(10.7
)
 
 
 
Derivatives not designated as hedging instruments:
 
 
For the three months ended September 30, 2019:
 
 
Commodity contracts
Cost of products and other
$
2.2

For the three months ended September 30, 2018:
 
 
Commodity contracts
Cost of products and other
$
(9.5
)
For the nine months ended September 30, 2019:
 
 
Commodity contracts
Cost of products and other
$
34.8

For the nine months ended September 30, 2018:
 
 
Commodity contracts
Cost of products and other
$
(55.9
)
 
 
 
Hedged items designated in fair value hedges:
 
 
For the three months ended September 30, 2019:
 
 
Crude oil, intermediate and refined product inventory
Cost of products and other
$
(23.6
)
For the three months ended September 30, 2018:
 
 
Intermediate and refined product inventory
Cost of products and other
$
8.2

For the nine months ended September 30, 2019:
 
 
Crude oil, intermediate and refined product inventory
Cost of products and other
$
11.4

For the nine months ended September 30, 2018:
 
 
Intermediate and refined product inventory
Cost of products and other
$
10.7



The Company had no ineffectiveness related to the fair value hedges for the three and nine months ended September 30, 2019 or 2018.