UPDATE 1-Phillips 66 adjusts NJ crude slate due to Bakken cost rise

Wed Jul 31, 2013 4:14pm EDT
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* Will run imports rather than U.S. crude as costs dictate

* Narrowed U.S. crude discounts to Brent cut 2Q profits

* May increase biofuel blending to cut ethanol credit costs

By Kristen Hays

HOUSTON, July 31 (Reuters) - U.S. independent refiner and chemical company Phillips 66 has increased runs of light crude imports at its New Jersey refinery as costs of North Dakota Bakken crude have risen in the last five months, executives told analysts on Wednesday.

"We have reduced our take on the (North Dakota) Bakken to the East Coast as we've adjusted our crude slates and (are) replacing that with more competitive barrels from imports," said Tim Taylor, executive vice president for commercial, marketing, transportation and business development, during the company's second-quarter earnings call.

Executives said the company still sees U.S. and Canadian heavy crude as cost-advantaged over imports that are priced off London's benchmark Brent crude, but they can adjust crude slates to optimize those costs as differentials move.

The discount of U.S. crude to London's Brent has narrowed sharply to less than $3 a barrel from more than $23 in February as pipeline projects came online to help alleviate a glut at the U.S. crude futures hub in Cushing, Oklahoma.   Continued...