Sunoco 2013 Annual Report Download - page 58

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also seek to maintain a position that is substantially balanced within our various commodity purchase and sales activities. We
may experience net unbalanced positions for short periods of time as a result of production, transportation and delivery
variances, as well as logistical issues associated with inclement weather conditions. When unscheduled physical inventory
builds or draws do occur, they are monitored and managed to a balanced position over a reasonable period of time.
We do not use futures or other derivative instruments to speculate on crude oil, refined products or NGL prices, as these
activities could expose us to significant losses. We do use derivative contracts as economic hedges against price changes related
to our forecasted refined products and NGL purchase and sale activities. These derivatives are intended to have equal and
opposite effects of the purchase and sale activities. At December 31, 2013, the fair market value of our open derivative
positions was a net liability of $2 million on 1.6 million barrels of refined products and NGLs. These derivative positions vary
in length but do not extend beyond one year. The potential decline in the market value of these derivatives from a hypothetical
10-percent adverse change in the year-end market prices of the underlying commodities that were being hedged by derivative
contracts at December 31, 2013 was estimated to be $1 million. This hypothetical loss was estimated by multiplying the
difference between the hypothetical and the actual year-end market prices of the underlying commodities by the contract
volume amounts.
For additional information concerning our commodity market risk activities, see Note 15 to the consolidated financial
statements included in Item 8. "Financial Statements and Supplementary Data."