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DERIVATIVES | 6 Months Ended
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Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives |
NOTE 5 - DERIVATIVES
OBJECTIVE AND STRATEGY Occidental uses a variety of derivative financial instruments and physical contracts to manage its exposure to commodity price fluctuations, transportation commitments and to fix margins on the future sale of stored commodity volumes. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Occidental may occasionally use a variety of derivative financial instruments to manage its exposure to foreign currency fluctuations and interest rate risks. Occidental also enters into derivative financial instruments for trading purpose. Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes, and at times for other strategies, such as to lock in rates on debt issuances. The value of cash flow hedges was insignificant for all periods presented. As of June 30, 2023, Occidental’s marketing derivatives are not designated as hedges. Occidental retired all remaining outstanding interest rate swaps in the twelve months ended December 31, 2022. MARKETING DERIVATIVES Occidental's marketing derivative instruments are short-duration physical and financial forward contracts. As of June 30, 2023, the weighted-average settlement price of these forward contracts was $73.72 per barrel and $2.65 per Mcf for crude oil and natural gas, respectively. The weighted-average settlement price was $81.37 per barrel and $7.89 per Mcf for crude oil and natural gas, respectively, as of December 31, 2022. Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled. Net gains and losses associated with marketing derivative instruments are recognized currently in net sales. The following table summarizes net short volumes associated with the outstanding marketing commodity derivatives:
long (short) | June 30, 2023 | December 31, 2022
Oil commodity contracts |  |
Volume (MMbbl) | (46) |  | (33) |
Natural gas commodity contracts |  |
Volume (Bcf) | (73) |  | (112) |
FAIR VALUE OF DERIVATIVES The following tables present the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when the derivatives are subject to netting arrangements, and are presented on a net basis in the Consolidated Condensed Balance Sheets:
millions | Fair Value Measurements Using | Netting (a) | Total Fair Value
Balance Sheet Classifications | Level 1 | Level 2 | Level 3
June 30, 2023 |  |  |  |  |
Marketing Derivatives |  |  |  |  |
Other current assets | $ | 976 |  | $ | 62 |  | $ | — |  | $ | (948) |  | $ | 90 |
Long-term receivables and other assets, net | 22 |  | 1 |  | — |  | (20) |  | 3 |
Accrued liabilities | (926) |  | (42) |  | — |  | 948 |  | (20) |
Deferred credits and other liabilities - other | (20) |  | — |  | — |  | 20 |  | — |
December 31, 2022 |  |  |  |  |
Marketing Derivatives |  |  |  |  |
Other current assets | $ | 920 |  | $ | 127 |  | $ | — |  | $ | (980) |  | $ | 67 |
Long-term receivables and other assets, net | 1 |  | 2 |  | — |  | (1) |  | 2 |
Accrued liabilities | (938) |  | (96) |  | — |  | 980 |  | (54) |
Deferred credits and other liabilities - other | (1) |  | (1) |  | — |  | 2 |  | — |
(a)These amounts do not include collateral. Occidental netted $35 million of collateral received from brokers against derivative assets and $1 million of collateral deposited with brokers against derivatives liabilities related to marketing derivatives as of June 30, 2023 and netted $15 million of collateral deposited with brokers against derivative liabilities related to marketing derivatives as of December 31, 2022. GAINS AND LOSSES ON DERIVATIVES The following table presents net gains related to Occidental's derivative instruments on the Consolidated Condensed Statements of Operations:
millions | Three months ended June 30, | Six months ended June 30,
Income Statement Classification | 2023 | 2022 | 2023 | 2022
Marketing Derivatives |  |  |  |
Net sales (a) | $ | 100 |  | $ | 324 |  | $ | 207 |  | $ | 459 |
Interest Rate Swaps |  |  |  |
Gains on interest rate swaps, net (b) | $ | — |  | $ | 127 |  | $ | — |  | $ | 262 |
(a) Includes derivative and non-derivative marketing activity. (b) Occidental retired all remaining outstanding interest rate swaps in the twelve months ended December 31, 2022. CREDIT RISK Certain of Occidental's over-the-counter derivative instruments contain credit-risk-contingent features, primarily tied to credit ratings for Occidental or its counterparties, which may affect the amount of collateral that each party would need to post. The aggregate fair value of derivative instruments with credit-risk-related contingent features, for which a net receivable position existed as of June 30, 2023, was $52 million. The aggregate fair value of derivative instruments with credit-risk-contingent features, for which a net liability position existed as of December 31, 2022, was $18 million.

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