4. Inventories

The cost of inventories is determined using the last-in, first-out (LIFO) method. Costs include crude oil and other feedstocks, labor, processing costs and refining overhead costs. Inventories are valued at the lower of cost or market value.

Inventories consist of the following, including estimated inventories of approximately $189,609 as of September 30, 2011, related to the Superior Acquisition:


	September 30,		December 31,
	2011		2010
Raw materials	$	120,150	$	12,885
Work in process		89,494		49,006
Finished goods		236,862		85,219

	$	446,506	$	147,110

The replacement cost of these inventories, based on current market values, would have been $75,712 and $55,855 higher as of September 30, 2011 and December 31, 2010, respectively. For the three and nine months ended September 30, 2010, the Company recorded $3,488 and $4,371, respectively, of gains in cost of sales in the unaudited condensed consolidated statements of operations due to the liquidation of lower cost inventory layers. No gains from the liquidation of lower cost inventory layers have been recorded in 2011.