* Western Refining's first-quarter profit beats estimates
* HollyFrontier profit misses estimates as costs rise (Adds HollyFrontier results, analysts' estimates, share price)
May 6 (Reuters) - Western Refining Inc and HollyFrontier Corp said they expect refining margins to grow in coming quarters due to lower crude costs.
The price for West Texas Intermediate crude oil for delivery into Midland, Texas, which Western Refining and HollyFrontier access easily, is lower than the price for the benchmark crude in Cushing, Oklahoma.
The growing oil production from the Permian Basin, stretching over Texas and New Mexico, has pushed down crude costs in the region, helping oil refiners boost margins.
Western Refining, which operates refineries in El Paso, Texas and Gallup in New Mexico, said the second quarter ending June was off to a "strong start", with margins strengthening.
"The WTI Midland/Cushing differential has widened during the quarter ... and we are seeing stronger values for finished products in our regions," Western Refining Chief Executive Jeff Stevens said in a statement.
The view was echoed by Mike Jennings, Chief Executive of HollyFrontier, which operates refineries in Kansas, Oklahoma, New Mexico, Wyoming and Utah.
"Looking forward, we expect continued growth in North American crude oil production, which we believe will solidify our company's structural advantage, with a current example being the differentials and margins we are experiencing in the Permian Basin," Jennings said in a statement.
Western Refining's profit rose 2 percent in the first quarter ended March 31, helped by a pre-tax hedging gain of $74 million.
Excluding the gain, the company earned 44 cents per share, which was higher than the 40 cents per share analysts' on average were expecting, according to Thomson Reuters I/B/E/S.
HollyFrontier's first-quarter profit more than halved as total operating costs and expenses rose 9 percent in the quarter.
The company's profit of 76 cents per share was also below the average analyst estimate of 77 cents per share.
Western Refining shares closed at $43.53 and HollyFrontier shares closed at $51.60 on Monday on the New York Stock Exchange. (Reporting by Swetha Gopinath in Bangalore; Editing by Savio D'Souza and Kirti Pandey)