Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Financial Instruments

Schedule of notional values of derivative instruments

	Units (1)		Unit of Measure
Exchange-Traded Derivatives
Long		84,325	Thousands of barrels
Short		(87,917)	Thousands of barrels
OTC Derivatives (Petroleum/Ethanol)
Long		11,185	Thousands of barrels
Short		(7,599)	Thousands of barrels

(1) Number of open positions and gross notional values do not measure the Partnership’s risk of loss, quantify risk or represent assets or liabilities of the Partnership, but rather indicate the relative size of the derivative instruments and are used in the calculation of the amounts to be exchanged between counterparties upon settlements.

Schedule of net gains and losses from derivatives recognized in consolidated statements of operations (in thousands)

	Statement of Gain (Loss)	Three Months Ended				Six Months Ended
	Recognized in Income on	June 30,				June 30,
	Derivatives	2020		2019		2020		2019
Derivatives in fair value hedging relationship
Exchange-traded futures contracts and OTC derivative contracts for petroleum commodity products	Cost of sales	$	(46,637)	$	5,899	$	1,698	$	1,238
Hedged items in fair value hedge relationship
Physical inventory	Cost of sales	$	44,025	$	(8,036)	$	(6,157)	$	(2,985)

Schedule of the amount of gains and losses from derivatives not involved in a fair value hedging relationship or in a hedging relationship recognized in the consolidated statements of income (in thousands)

	Statement of Gain (Loss)	Three Months Ended				Six Months Ended
Derivatives not designated as	Recognized in	June 30,				June 30,
hedging instruments	Income on Derivatives	2020		2019		2020		2019
Commodity contracts	Cost of sales	$	4,516	$	5,922	$	4,066	$	15,125

Schedule of fair values of derivative instruments and location in consolidated balance sheets (in thousands)

		June 30, 2020
		Derivatives		Derivatives Not
		Designated as		Designated as
		Hedging		Hedging
	Balance Sheet Location	Instruments		Instruments		Total
Asset Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	5,432	$	73,174	$	78,606
Forward derivative contracts (1)	Derivative assets		—		48,571		48,571
Total asset derivatives		$	5,432	$	121,745	$	127,177
Liability Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	(13,330)	$	(71,571)	$	(84,901)
Forward derivative contracts (1)	Derivative liabilities		—		(8,089)		(8,089)
Total liability derivatives		$	(13,330)	$	(79,660)	$	(92,990)

		December 31, 2019
		Derivatives		Derivatives Not
		Designated as		Designated as
		Hedging		Hedging
	Balance Sheet Location	Instruments		Instruments		Total
Asset Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	—	$	31,645	$	31,645
Forward derivative contracts (1)	Derivative assets		—		4,564		4,564
Total asset derivatives		$	—	$	36,209	$	36,209
Liability Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	(3,838)	$	(26,354)	$	(30,192)
Forward derivative contracts (1)	Derivative liabilities		—		(12,698)		(12,698)
Total liability derivatives		$	(3,838)	$	(39,052)	$	(42,890)

(1) Forward derivative contracts include the Partnership’s petroleum and ethanol physical and financial forwards and OTC swaps.