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FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Recurring Fair Value Measurements
The following tables set forth our recurring fair value measurements for the periods indicated:
 
September 30, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
183

 
$
—

 
$
53,946

 
$
54,129

 
$
(54,129
)
 
$
—

Interest-rate contracts
—

 
50,509

 
—

 
50,509

 
—

 
50,509

Total derivative assets
$
183

 
$
50,509

 
$
53,946

 
$
104,638

 
$
(54,129
)
 
$
50,509

Derivative liabilities
 

 
 

 
 

 
 

 
 

 
 

Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
(17,337
)
 
$
—

 
$
(83,013
)
 
$
(100,350
)
 
$
100,350

 
$
—

Physical contracts
—

 
—

 
(2,010
)
 
(2,010
)
 
—

 
(2,010
)
Total derivative liabilities
$
(17,337
)
 
$
—

 
$
(85,023
)
 
$
(102,360
)
 
$
100,350

 
$
(2,010
)
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At September 30, 2018, we held no cash and posted $67.8 million of cash with various counterparties, including $46.2 million of cash collateral that is offsetting derivative net liability positions under master-netting arrangements in the table above. The remaining $21.6 million of cash collateral in excess of derivative net liability positions is included in other current assets in our Consolidated Balance Sheets.

 
December 31, 2017
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
4,252

 
$
—

 
$
20,203

 
$
24,455

 
$
(24,455
)
 
$
—

Interest rate contracts
—

 
49,960

 
—

 
49,960

 
—

 
49,960

Total derivative assets
$
4,252

 
$
49,960

 
$
20,203

 
$
74,415

 
$
(24,455
)
 
$
49,960

Derivative liabilities
 

 
 

 
 

 
 

 
 

 
 

Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
(5,708
)
 
$
—

 
$
(48,260
)
 
$
(53,968
)
 
$
53,936

 
$
(32
)
Physical contracts
—

 
—

 
(4,781
)
 
(4,781
)
 
—

 
(4,781
)
Total derivative liabilities
$
(5,708
)
 
$
—

 
$
(53,041
)
 
$
(58,749
)
 
$
53,936

 
$
(4,813
)

(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At December 31, 2017, we held no cash and posted $49.7 million of cash with various counterparties, including $29.5 million of cash collateral that is offsetting derivative net liability positions under master-netting arrangements in the table above. The remaining $20.2 million of cash collateral in excess of derivative net liability positions is included in other current assets in our Consolidated Balance Sheets.
Reconciliation of Level 3 Fair Value Measurements
The following table sets forth a reconciliation of our Level 3 fair value measurements for the periods indicated:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
Derivative Assets (Liabilities)
2018
 
2017
 
2018
 
2017
 
(Thousands of dollars)
Net assets (liabilities) at beginning of period
$
(23,501
)
 
$
750

 
$
(32,838
)
 
$
(23,319
)
Total realized/unrealized gains (losses):


 


 
 
 
 
Included in earnings (a)
(22
)
 
(675
)
 
(122
)
 
(417
)
Included in other comprehensive income (loss)
(7,554
)
 
(26,581
)
 
1,883

 
(2,770
)
Net assets (liabilities) at end of period
$
(31,077
)
 
$
(26,506
)
 
$
(31,077
)
 
$
(26,506
)
(a) - Included in commodity sales revenues in our Consolidated Statements of Income.