Inventories

The Company’s inventories are stated at the lower of cost or market. Cost is determined under the last-in, first-out (LIFO) method for crude oil, refined products, and blendstock inventories. Materials and supplies are stated at average cost.

Carrying value of inventories consisted of the following:



	September 30, 2011		December 31, 2010
Crude oil, refined products and blendstocks	$	839	$	862
Crude oil inventory consigned to others	19,858		14,937
Materials and supplies	2,759		2,762
Total inventories	$	23,456	$	18,561

Crude oil, refined products and blendstock inventories totaled 312 thousand barrels and 289 thousand barrels as of September 30, 2011 and December 31, 2010, respectively.

Market values of crude oil, refined products and blendstock inventories exceeded LIFO costs by $12,817 and $9,822 at September 30, 2011 and December 31, 2010, respectively.

Crude oil inventory consigned to others represents inventory located at storage facilities that were sold to third parties with an obligation by the Company to repurchase the inventory at the end of the respective agreements. As a result of this requirement to repurchase inventory, no revenue was recorded on these transactions and the inventory volumes remain valued under the LIFO method.

The Company had 282 thousand barrels and 252 thousand barrels of crude oil consigned to others at September 30, 2011 and December 31, 2010, respectively. The Company recorded liabilities associated with this consigned inventory of $25,479 and $23,122 in other non-current liabilities at September 30, 2011 and December 31, 2010, respectively.

Additionally, the Company recorded accrued liabilities of $998 and accounts receivable of $1,073 at September 30, 2011 and December 31, 2010, respectively, for forward commitments related to month-end consignment inventory target levels differing from projected levels and the associated pricing with these inventory level differences.

Normal Purchase Normal Sale

Effective January 1, 2011, the Company elected to account for all inventory financing agreements it has under the "Normal Purchase Normal Sales" exemption of FASB ASC 815, Derivatives and Hedging. This exemption applies to situations where commodities are physically delivered. In previous periods the Company recorded changes in the fair value of the estimated settlement liability of these contracts through the statement of operations. Beginning January 1, 2011 and forward, changes in fair value of the estimated settlement liability will no longer be recorded due to the Normal Purchase Normal Sale exemption. If the contracts were settled September 30, 2011, the payment would be in excess of the liability recorded by $5,616.