UPDATE 1-U.S refiner Phillips 66's profit beats on higher refining margins

(Adds background on WTI-Brent, compares with estimates)

Oct 26 (Reuters) - Independent oil refiner Phillips 66 beat analysts' estimates for third-quarter profit on Friday, as cheaper domestic crude prices boosted its refining margins.

Margins for most independent U.S. refiners, which process heavy crude from countries such as Venezuela and Canada into diesel, gasoline and other products, have been boosted as U.S. crude's discount to Brent widened to more than $10 a barrel.

The spread has widened on transportation constraints, that led to steeper discounts for Canada's oil than U.S. crude, which analysts say benefits refiners in the midwest that process a higher volume of Canadian crude than those on the Gulf Coast.

Houston-based Phillips 66 primarily operates in the midwest and southwest region of the United States.

The company said earnings from its refining business, its biggest, rose 70.2 percent to $936 million.

Consolidated earnings rose to $1.49 billion from $823 million.

The company's adjusted earnings rose to $1.46 billion, or $3.10 per share, in the third quarter, from $858 million, or $1.66 per share, a year earlier.

Analysts on average had expected the company to earn $2.48 per share on an adjusted basis, according to Refinitiv data. (Reporting by Laharee Chatterjee in Bengaluru; Editing by Shounak Dasgupta)