Inventory Is the Difference Between Production and Refining

Inventories are a buffer between the actual production and refining and then the consumption by the end user. So they don't just take gallons of gasoline directly from the refinery, put them in a big truck or a pipeline or something - that's not what happens. When refiners want to ship product to the actual final distribution point, whether it's a cargo ship heading over the ocean or a local distribution center in a retail outlet, then they draw down from inventories.