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DERIVATIVES
 12 Months Ended
Dec. 31, 2017
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 the A&R Intermediation Agreements that contain purchase obligations for certain volumes of intermediates and refined products. The purchase obligations related to 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 intermediates and refined products. The level of activity for these derivatives is based on the level of operating inventories.

As of December 31, 2017, there were 3,000,142 barrels of intermediates and refined products (2,942,348 barrels at December 31, 2016) 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 December 31, 2017, there were 22,348,000 barrels of crude oil and 1,989,000 barrels of refined products (5,950,000 and 2,831,000, respectively, as of December 31, 2016), 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 December 31, 2017 and December 31, 2016 and the line items in the consolidated balance sheet in which the fair values are reflected.
Description

Balance Sheet Location
Fair Value
Asset/(Liability)
Derivatives designated as hedging instruments:
 
 
December 31, 2017:
 
 
Derivatives included with the inventory intermediation agreement obligations
Accrued expenses
$
(7,721
)
December 31, 2016:
 
 
Derivatives included with the inventory intermediation agreement obligations
Accrued expenses
$
6,058

 
 
 
Derivatives not designated as hedging instruments:
 
 
December 31, 2017:
 
 
Commodity contracts
Accrued expenses
$
(74,320
)
December 31, 2016:
 
 
Commodity contracts
Accrued expenses
$
3,508



The following table provides information about the gains or losses recognized in income on these derivative instruments and the line items in the 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
Derivatives designated as hedging instruments:
 
 
For the year ended December 31, 2017:
 
 
Derivatives included with the inventory intermediation agreement obligations
Cost of products and other
$
(13,779
)
For the year ended December 31, 2016:
 
 
Derivatives included with the inventory intermediation agreement obligations
Cost of products and other
$
(29,453
)
For the year ended December 31, 2015
 
 
Derivatives included with inventory supply arrangement obligations
Cost of products and other
$
(4,251
)
Derivatives included with the inventory intermediation agreement obligations
Cost of products and other
$
(59,323
)
Derivatives not designated as hedging instruments:
 
 
For the year ended December 31, 2017:
 
 
Commodity contracts
Cost of products and other
$
(85,443
)
For the year ended December 31, 2016:
 
 
Commodity contracts
Cost of products and other
$
(55,557
)
For the year ended December 31, 2015
 
 
Commodity contracts
Cost of products and other
$
32,416

 
 
 
Hedged items designated in fair value hedges:
 
 
For the year ended December 31, 2017:
 
 
Intermediate and refined product inventory
Cost of products and other
$
13,779

For the year ended December 31, 2016:
 
 
Intermediate and refined product inventory
Cost of products and other
$
29,453

For the year ended December 31, 2015
 
 
Crude oil and feedstock inventory
Cost of products and other
$
4,251

Intermediate and refined product inventory
Cost of products and other
$
59,323



The Company had no ineffectiveness related to the fair value hedges as of December 31, 2017, 2016 and 2015.