Inventories

6 Months Ended

Jun. 30, 2019

Inventories are stated at the lower of cost and net realizable value. In the United States, we manufacture certain finished products and parts inventories for drill bits, completion products, bulk materials and other tools that are recorded using the last-in, first-out method, which totaled $189 million as of June 30, 2019 and $186 million as of December 31, 2018. If the average cost method had been used, total inventories would have been $21 million higher than reported as of June 30, 2019 and $24 million higher as of December 31, 2018. The cost of the remaining inventory was recorded using the average cost method. We had $3.3 billion of inventory as of June 30, 2019, an 11% increase from December 31, 2018, primarily associated with a build-up of our artificial lift and directional drilling inventory. Inventories consisted of the following:



Millions of dollars	June 30, 2019		December 31, 2018
Finished products and parts	$	2,102	$	1,947
Raw materials and supplies	1,089		934
Work in process	156		147
Total	$	3,347	$	3,028

All amounts in the table above are reported net of obsolescence reserves of $194 million as of June 30, 2019 and $219 million as of December 31, 2018.