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Derivative Instruments
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments

4. Derivative Instruments

 

The Company values its derivative instruments using alternative pricing sources and market observable inputs, and accordingly the Company classifies the valuation techniques that use these inputs as Level 2.

 

The following table presents the gross fair value of the Company’s derivative instruments not designated as hedging instruments and their locations on the consolidated balance sheets:

 

   As of December 31, 2022 
Derivative liabilities  Level 1 input   Level 2 input   Level 3 input   Total fair value 
Commodity contracts  $-   $109,346   $-   $109,346 

 

   As of December 31, 2021 
Derivative assets  Level 1 input   Level 2 input   Level 3 input   Total fair value 
Commodity contracts  $-   $291,860   $-   $291,860 

 

The following table summarizes the gross notional values of the Company’s commodity contracts used for risk management purposes that were outstanding as of December 31, 2022 and 2021:

 

   December 31,  December 31, 
Derivative Instruments  Units  2022   Units   2021 
Commodity contracts                  
Long  Metric ton   3,600    Barrel    49 
Short  Metric ton   500    Barrel    - 

 

The following table presents the effect and financial statement location of the Company’s derivative instruments not designated as hedging instruments on the Company’s consolidated statements of income and comprehensive income:

 

The following are the amounts of realized and unrealized gain during the years ended December 31 2022 and 2021:

 

   Location   2022   2021 
             
Gain from commodity contracts   Cost of revenue   $766,769   $290,565