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DERIVATIVES | 3 Months Ended
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Mar. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES | DERIVATIVES The Company uses derivative instruments to mitigate certain exposures to commodity price risk. Prior to December 31, 2015, the Company’s crude supply agreement contained purchase obligations for certain volumes of crude oil and other feedstocks. In addition, the Company entered into Inventory Intermediation Agreements commencing in July 2013 that contain purchase obligations for certain volumes of intermediates and refined products. The purchase obligations related to crude oil, feedstocks, 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 crude oil and refined products. The level of activity for these derivatives is based on the level of operating inventories. As of March 31, 2016, there were no barrels of crude oil and feedstocks (no barrels at December 31, 2015) outstanding under these derivative instruments designated as fair value hedges and no barrels (no barrels at December 31, 2015) outstanding under these derivative instruments not designated as hedges. As of March 31, 2016, there were 3,440,594 barrels of intermediates and refined products (3,776,011 barrels at December 31, 2015) outstanding under these derivative instruments designated as fair value hedges and no barrels (no barrels at December 31, 2015) outstanding under these derivative instruments not designated as 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 March 31, 2016, there were 39,380,250 barrels of crude oil and 4,502,000 barrels of refined products (39,577,000 and 4,599,136, respectively, as of December 31, 2015), 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 March 31, 2016 and December 31, 2015 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: |  |
March 31, 2016: |  |
Derivatives included with the inventory intermediation agreement obligations | Accrued expenses | $ | 365 |
December 31, 2015 |  |
Derivatives included with the inventory intermediation agreement obligations | Accrued expenses | $ | 35,511 |
Derivatives not designated as hedging instruments: |  |
March 31, 2016: |  |
Commodity contracts | Accounts receivable | $ | 14,684 |
December 31, 2015 |  |
Commodity contracts | Accounts receivable | $ | 46,127 |
The following table provides information about the gain or loss recognized in income on these derivative instruments and the line items in the consolidated financial statements 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 three months ended March 31, 2016: |  |
Derivatives included with the inventory intermediation agreement obligations | Cost of sales | $ | (35,146 | )
For the three months ended March 31, 2015: |  |
Derivatives included with inventory supply arrangement obligations | Cost of sales | $ | (2,821 | )
Derivatives included with the inventory intermediation agreement obligations | Cost of sales | $ | (63,686 | )
Derivatives not designated as hedging instruments: |  |
For the three months ended March 31, 2016: |  |
Commodity contracts | Cost of sales | $ | (19,953 | )
For the three months ended March 31, 2015: |  |
Commodity contracts | Cost of sales | $ | (41,128 | )
Hedged items designated in fair value hedges: |  |
For the three months ended March 31, 2016: |  |
Intermediate and refined product inventory | Cost of sales | $ | 35,146 |
For the three months ended March 31, 2015: |  |
Crude oil and feedstock inventory | Cost of sales | $ | 2,821 |
Intermediate and refined product inventory | Cost of sales | $ | 63,686 |
The Company had no ineffectiveness related to the Company's fair value hedges for the three months ended March 31, 2016 and 2015.

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