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Financial and Derivative Instruments
 9 Months Ended
Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial and Derivative Instruments
Financial and Derivative Instruments
The company’s derivative instruments principally include crude oil, natural gas and refined product futures, swaps, options, and forward contracts. None of the company’s derivative instruments are designated as hedging instruments, although certain of the company’s affiliates make such a designation. The company’s derivatives are not material to the company’s consolidated financial position, results of operations or liquidity. The company believes it has no material market or credit risks to its operations, financial position or liquidity as a result of its commodities and other derivatives activities.
The company uses derivative commodity instruments traded on the New York Mercantile Exchange and on electronic platforms of the Inter-Continental Exchange and Chicago Mercantile Exchange. In addition, the company enters into swap contracts and option contracts principally with major financial institutions and other oil and gas companies in the “over-the-counter” markets, which are governed by International Swaps and Derivatives Association agreements and other master netting arrangements.
Derivative instruments measured at fair value at September 30, 2018, and December 31, 2017, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows:
Consolidated Balance Sheet: Fair Value of Derivatives Not Designated as Hedging Instruments
(Millions of dollars)
Type of
Contract
 
Balance Sheet Classification
 
At September 30
2018
 
At December 31
2017
Commodity
 
Accounts and notes receivable, net
 
$
15

 
$
22

Commodity
 
Long-term receivables, net
 
1

 
—

Total Assets at Fair Value
 
$
16

 
$
22

Commodity
 
Accounts payable
 
$
76

 
$
122

Commodity
 
Deferred credits and other noncurrent obligations
 
8

 
2

Total Liabilities at Fair Value
 
$
84

 
$
124


Consolidated Statement of Income: The Effect of Derivatives Not Designated as Hedging Instruments
(Millions of dollars)
 
 
 
 
Gain / (Loss)
Three Months Ended
September 30
 
Gain / (Loss)
Nine Months Ended
September 30
Type of
Contract
 
Statement of Income Classification
 
2018
 
2017
 
2018
 
2017
Commodity
 
Sales and other operating revenues
 
$
(80
)
 
$
(196
)
 
$
(257
)
 
$
82

Commodity
 
Purchased crude oil and products
 
(10
)
 
(7
)
 
(36
)
 
3

Commodity
 
Other income
 
1

 
1

 
1

 
(2
)
 
 
 
 
$
(89
)
 
$
(202
)
 
$
(292
)
 
$
83


The table below represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated Balance Sheet at September 30, 2018, and December 31, 2017.
Consolidated Balance Sheet: The Effect of Netting Derivative Assets and Liabilities
(Millions of dollars)
 
 
Gross Amount Recognized
 
Gross Amounts Offset
 
Net Amounts Presented
 
 Gross Amounts Not Offset
 
Net Amount
At September 30, 2018
 
 
 
 
 
Derivative Assets
 
$
3,399

 
$
3,383

 
$
16

 
$
9

 
$
7

Derivative Liabilities
 
$
3,467

 
$
3,383

 
$
84

 
$
9

 
$
75

 
 
 
 
 
 
 
 
 
 
 
At December 31, 2017
 
 
 
 
 
 
 
 
 
 
Derivative Assets
 
$
1,169

 
$
1,147

 
$
22

 
$
—

 
$
22

Derivative Liabilities
 
$
1,271

 
$
1,147

 
$
124

 
$
—

 
$
124


Derivative assets and liabilities are classified on the Consolidated Balance Sheet as accounts and notes receivable, long-term receivables, accounts payable, and deferred credits and other noncurrent obligations. Amounts not offset on the Consolidated Balance Sheet represent positions that do not meet all the conditions for "a right of offset."