Inventories

12 Months Ended

Dec. 31, 2023

Note 3. Inventories

Our inventory amounts by product type were as follows at the dates indicated:

	December 31,
	2023		2022
NGLs	$	2,392	$	1,689
Petrochemicals and refined products		536		430
Crude oil		419		411
Natural gas		5		24
Total	$	3,352	$	2,554

In those instances where we take ownership of inventory volumes through percent-of-liquids contracts and similar arrangements (as opposed to outright purchases from third parties for cash), these volumes are valued at market-based prices during the month in which they are acquired.

The following table presents our total cost of sales amounts and lower of cost or net realizable value adjustments for the years indicated:

	For the Year Ended December 31,
	2023			2022			2021
Cost of sales (1)		$	37,023		$	45,836		$	29,887
Lower of cost or net realizable value adjustments recognized in cost of sales			31			19			20

(1)	Cost of sales is a component of “Operating costs and expenses,” as presented on our Statements of Consolidated Operations. Fluctuations in these amounts are primarily due to changes in energy commodity prices and sales volumes associated with our marketing activities.

Due to fluctuating commodity prices, we recognize lower of cost or net realizable value adjustments when the carrying value of our available-for-sale inventories exceeds their net realizable value. These non-cash charges are a component of cost of sales in the period they are recognized. To the extent our commodity hedging strategies address inventory-related price risks and are successful, these inventory valuation adjustments are mitigated or offset. See Note 14 for a description of our commodity hedging activities.