Inventories

Inventory consists of the following components:



	March 31, 2018			December 31, 2017
	(In thousands)
Crude oil	$	545,794		$	581,417
Other raw materials and unfinished products⁽¹⁾	338,327			396,618
Finished products⁽²⁾	554,602			655,336
Lower of cost or market reserve	(119,995		)	(223,833		)
Process chemicals⁽³⁾	33,905			24,792
Repair and maintenance supplies and other ⁽⁴⁾	239,648			195,762
Total inventory	$	1,592,281		$	1,630,092


(1)	Other raw materials and unfinished products include feedstocks and blendstocks, other than crude.


(2)	Finished products include gasolines, jet fuels, diesels, lubricants, asphalts, LPG’s and residual fuels.


(3)	Process chemicals include additives and other chemicals.


(4)	Includes RINs.

Inventories, which are valued at the lower of LIFO cost or market, reflect a valuation reserve of $120.0 million and $223.8 million at March 31, 2018 and December 31, 2017, respectively. The December 31, 2017 market reserve of $223.8 million was reversed due to the sale of inventory quantities that gave rise to the 2017 reserve. A new market reserve of $120.0 million was established as of March 31, 2018 based on market conditions and prices at that time. The effect of the change in lower of cost or market reserve was a decrease to cost of goods sold totaling $103.8 million for the three months ended March 31, 2018 and an increase of $11.8 million for the three months ended March 31, 2017, respectively.

At March 31, 2018, the LIFO value of inventory, net of the lower of cost or market reserve, was equal to current costs.

During the three months ended March 31, 2018, the EPA granted the Cheyenne Refinery a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2015 and 2017 calendar years end. As a result, the Cheyenne Refinery’s gasoline and diesel production are not subject to the percentage of production that must satisfy a Renewable Volume Obligation (“RVO”) for those years.

As of the date we received the 2017 Cheyenne Refinery exemption, we had not yet submitted RINs to the EPA to satisfy this 2017 RVO, which we intended to satisfy, in part, with 2016 vintage RINs subject to the 20% carryover limit. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $37.9 million, representing the net cost of the Cheyenne Refinery’s RINs charged to cost of products sold in 2017, less the loss incurred from selling 2016 vintage RINs prior to their expiration in 2018.

In the first quarter of 2018, the EPA allowed us to generate new 2018 vintage RINs to replace the RINs previously submitted to meet the Cheyenne Refinery’s 2015 RVO. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $33.8 million representing the fair value of the 2018 RINs generated because of the Cheyenne Refinery’s exemption of its 2015 RVO.