
4.	INVENTORIES

Inventories consisted of the following (in millions):



	December 31,
	2016		2015
Refinery feedstocks	$	2,068	$	2,404
Refined petroleum products and blendstocks	3,153		3,774
Ethanol feedstocks and products	238		242
Materials and supplies	250		244
Inventories, before lower of cost or market inventory valuation reserve	5,709		6,664
Lower of cost or market inventory valuation reserve	—		(766		)
Inventories	$	5,709	$	5,898

Inventories are valued at the lower of cost or market. As of December 31, 2015, we had a valuation reserve of $766 million in order to state our inventories at market. As of December 31, 2016, we reevaluated our inventories and determined that our cost was lower than market. As a result, we recorded a change in our lower of cost or market inventory valuation reserve that resulted in a net benefit to our results of operations of $747 million for the year ended December 31, 2016. The income statement change for the years ended December 31, 2016 and 2015 differs from the change in the balance sheet reserve due to the foreign currency effect of inventories held by our international operations.

During the year ended December 31, 2016, we had a liquidation of LIFO inventory layers that increased cost of sales by $120 million. As of December 31, 2016, the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by $1.9 billion. As of December 31, 2016 and 2015, our non-LIFO inventories accounted for $641 million and $668 million, respectively, of our total inventories.