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Derivative Instruments And Hedging Activities
 9 Months Ended
Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments And Hedging Activities Derivative Instruments and Hedging Activities
Commodity Price Risk Management
Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.
Foreign Currency Risk Management
We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward and foreign exchange swap contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.

Accounting Hedges
We have swap contracts serving as cash flow hedges against price risk on forecasted purchases of natural gas and to lock in basis spread differentials on forecasted purchases of crude oil. We also periodically have forward sales contracts that lock in the prices of future sales of crude oil and refined product. These contracts have been designated as accounting hedges and are measured at fair value with offsetting adjustments (gains/losses) recorded directly to other comprehensive income. These fair value adjustments are later reclassified to earnings as the hedging instruments mature.

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of hedging instruments under hedge accounting:
Net Unrealized Gain (Loss) Recognized in OCIGain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging InstrumentsThree Months Ended
September 30,		Income Statement LocationThree Months Ended
September 30,
2020201920202019
(In thousands)
Commodity contracts$2,492 $(7,562)Sales and other revenues$(5,217)$— 
Cost of products sold983 6,027 
Operating expenses(352)(454)
Total$2,492 $(7,562)$(4,586)$5,573 

Net Unrealized Gain (Loss) Recognized in OCIGain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging InstrumentsNine Months Ended
September 30,		Income Statement LocationNine Months Ended
September 30,
2020201920202019
(In thousands)
Commodity contracts$(3,918)$372 Sales and other revenues$(5,168)$(1,799)
Cost of products sold3,272 15,323 
Operating expenses(1,515)(987)
Total$(3,918)$372 $(3,411)$12,537 

Economic Hedges
We have commodity contracts including contracts to lock in basis spread differentials on forecasted purchases of crude oil, swap contracts to lock in the crack spread of WTI and gasoline, NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory and forward purchase and sell contracts that serve as economic hedges (derivatives used for risk management, but not designated as accounting hedges). We also have forward currency contracts to fix the rate of foreign currency. In addition, our catalyst financing arrangements discussed in Note 9 could require repayment under certain conditions based on the future pricing of platinum, which is an embedded derivative. These contracts are measured at fair value with offsetting adjustments (gains/losses) recorded directly to income.
The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:
Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging InstrumentsIncome Statement LocationThree Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
(In thousands)
Commodity contractsCost of products sold$2,880 $8,640 $20,789 $1,561 
Interest expense(2,170)(1,720)2,542 (2,995)
Foreign currency contracts
Gain (loss) on foreign currency transactions
(8,177)5,713 10,983 (8,983)
Total$(7,467)$12,633 $34,314 $(10,417)

As of September 30, 2020, we have the following notional contract volumes related to outstanding derivative instruments:
Notional Contract Volumes by Year of Maturity
Total Outstanding Notional20202021Unit of Measure
Derivatives Designated as Hedging Instruments
Natural gas price swaps - long2,250,000 450,000 1,800,000 MMBTU
Crude oil price swaps (basis spread) - long
1,196,000 1,196,000 — Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short1,045,000 830,000 215,000 Barrels
Crude oil price swaps (basis spread) - long368,000 368,000 — Barrels
WTI and gasoline crack spread swaps - short100,000 100,000 — Barrels
Forward gasoline and diesel contracts - long200,000 200,000 — Barrels
Foreign currency forward contracts419,278,042 106,910,645 312,367,397 U.S. dollar
Forward commodity contracts (platinum)40,867 — 40,867 Troy ounces
The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.
Derivatives in Net Asset PositionDerivatives in Net Liability Position
Gross AssetsGross Liabilities Offset in Balance SheetNet Assets Recognized in Balance SheetGross LiabilitiesGross Assets Offset in Balance SheetNet Liabilities Recognized in Balance Sheet
 (In thousands)
September 30, 2020
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts
$915 $(263)$652 $58 $— $58 
$915 $(263)$652 $58 $— $58 
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts
$1,530 $— $1,530 $— $— $— 
Commodity price swap contracts
2,168 — 2,168 76 — 76 
Commodity forward contracts
71 — 71 58 — 58 
Foreign currency forward contracts
— — — 5,397 (1,808)3,589 
$3,769 $— $3,769 $5,531 $(1,808)$3,723 
Total net balance$4,421 $3,781 
Balance sheet classification:Prepayment and other$4,421 Accrued liabilities$3,723 
Other long-term liabilities58 
$4,421 $3,781 

Derivatives in Net Asset PositionDerivatives in Net Liability Position
Gross AssetsGross Liabilities Offset in Balance SheetNet Assets Recognized in Balance SheetGross LiabilitiesGross Assets Offset in Balance SheetNet Liabilities Recognized in Balance Sheet
 (In thousands)
December 31, 2019
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts
$7,526 $(1,784)$5,742 $1,230 $— $1,230 
$7,526 $(1,784)$5,742 $1,230 $— $1,230 
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts
$— $— $— $2,578 $— $2,578 
Commodity price swap contracts
7,713 — 7,713 — — — 
Commodity forward contracts
4,133 — 4,133 3,685 — 3,685 
Foreign currency forward contracts
— — — 6,722 — 6,722 
$11,846 $— $11,846 $12,985 $— $12,985 
Total net balance$17,588 $14,215 
Balance sheet classification:Prepayment and other$17,588 Accrued liabilities$12,985 
Other long-term liabilities1,230 
$17,588 $14,215 
At September 30, 2020, we had a pre-tax net unrealized gain of $0.6 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2021. Assuming commodity prices remain unchanged, an unrealized gain of $0.7 million will be effectively transferred from accumulated other comprehensive income into the statement of income as the hedging instruments contractually mature over the next twelve-month period.