Inventories

6 Months Ended

Jun. 30, 2020

Inventories consisted of the following (in millions):



	June 30, 2020			December 31, 2019
Refinery feedstocks	$	2,000		$	2,399
Refined petroleum products and blendstocks	3,161			4,034
Renewable diesel feedstocks and products	53			46
Ethanol feedstocks and products	224			260
Materials and supplies	276			274
Inventories before LCM inventory valuation reserve	5,714			7,013
LCM inventory valuation reserve	(294		)	—
Inventories	$	5,420		$	7,013

We compare the market value of inventories to their cost on an aggregate basis, excluding materials and supplies. In determining the market value of our inventories, we assume that feedstocks are converted into refined products, which requires us to make estimates regarding the refined products expected to be produced from those feedstocks and the conversion costs required to convert those feedstocks into refined products. We also estimate the usual and customary transportation costs required to move the inventory from our plants to the appropriate points of sale. We then apply an estimated selling price to our inventories. If the aggregate market value is less than the aggregate cost, we recognize a loss for the difference in our statements of income. To the extent the aggregate market value subsequently increases, we would recognize an increase to the value of our inventories (not to exceed cost) and a gain in our statements of income.

The market value of our last-in, first-out (LIFO) inventory fell below our historical LIFO inventory costs as of March 31, 2020, and as a result, we recorded an LCM inventory valuation reserve of $2.5 billion in order to state our inventories at market. As of June 30, 2020, our LCM inventory valuation reserve was $294 million. The change in our LCM inventory valuation reserve resulted in a net benefit of $2.2 billion and a net charge of $294 million to our results of operations during the three and six months ended June 30, 2020, respectively. As of December 31, 2019, the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by $2.5 billion.

Our non-LIFO inventories accounted for $912 million and $1.4 billion of our total inventories as of June 30, 2020 and December 31, 2019, respectively.