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FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Recurring Fair Value Measurements The following tables set forth our recurring fair value measurements for the periods indicated:
 
September 30, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
12,267

 
$
—

 
$
68,049

 
$
80,316

 
$
(40,413
)
 
$
39,903

Physical contracts
—

 
—

 
579

 
579

 
—

 
579

Total derivative assets
$
12,267

 
$
—

 
$
68,628

 
$
80,895

 
$
(40,413
)
 
$
40,482

Derivative liabilities
 
 
 

 
 

 
 

 
 

 
 

Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
—

 
$
—

 
$
(40,413
)
 
$
(40,413
)
 
$
40,413

 
$
—

Interest-rate contracts
—

 
(276,865
)
 
—

 
(276,865
)
 
—

 
(276,865
)
Total derivative liabilities
$
—

 
$
(276,865
)
 
$
(40,413
)
 
$
(317,278
)
 
$
40,413

 
$
(276,865
)
(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, 2019, we held no cash and posted $1.9 million of cash with various counterparties, which is included in other current assets in our Consolidated Balance Sheet.

 
December 31, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
10,812

 
$
—

 
$
69,165

 
$
79,977

 
$
(32,739
)
 
$
47,238

Physical contracts
—

 
—

 
1,142

 
1,142

 
—

 
1,142

Interest-rate contracts
—

 
19,005

 
—

 
19,005

 
—

 
19,005

Total derivative assets
$
10,812

 
$
19,005

 
$
70,307

 
$
100,124

 
$
(32,739
)
 
$
67,385

Derivative liabilities
 

 
 

 
 

 
 

 
 

 
 

Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
$
(2,916
)
 
$
—

 
$
(29,823
)
 
$
(32,739
)
 
$
32,739

 
$
—

Interest-rate contracts
—

 
(99,260
)
 
—

 
(99,260
)
 
—

 
(99,260
)
Total derivative liabilities
$
(2,916
)
 
$
(99,260
)
 
$
(29,823
)
 
$
(131,999
)
 
$
32,739

 
$
(99,260
)

(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, 2018, we held no cash and posted $0.8 million of cash with various counterparties, which is included in other current assets in our Consolidated Balance Sheet.
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)
2019
 
2018
 
2019
 
2018
 
(Thousands of dollars)
Net assets (liabilities) at beginning of period
$
19,274

 
$
(23,501
)
 
$
40,484

 
$
(32,838
)
Total changes in fair value:


 


 
 
 
 
Included in net income (a)
—

 
(22
)
 
—

 
(122
)
Included in other comprehensive income (loss) (b)
8,941

 
(7,554
)
 
(12,269
)
 
1,883

Net assets (liabilities) at end of period
$
28,215

 
$
(31,077
)
 
$
28,215

 
$
(31,077
)
(a) - Included in commodity sales revenues/cost of sales and fuel in our Consolidated Statements of Income.
(b) - Included in change in fair value of derivatives in our Consolidated Statements of Comprehensive Income.