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By Robert Campbell

NEW YORK, July 5 (Reuters) - Water levels at the flooded Coffeyville Resources refinery in Kansas have dropped significantly, allowing office staff to return to work on Thursday, a Coffeyville spokesman said.

But part of the 108,000 barrel-per-day refinery, which supplies oil products to the Midwest, remained under water. Workers will wait until the floodwaters subside before making damage assessments and determining when the refinery can restart, said Steve Eames, a Coffeyville spokesman.

"The water's gone down considerably although there are parts that are still flooded," said Eames.

Coffeyville resources shut its refinery last weekend as floodwaters overwhelmed the city's flood defenses. The inundation led to an oil spill and has sent wholesale gasoline prices in the region up over 20 cents per gallon.

The oil spill was caused when the refinery's main crude oil tank overflowed. The overflow was halted, but an updated estimate of the amount of oil spilled was available. Preliminary assessments put the amount of oil spilled at 1,000 barrels. Eames did not have an updated estimate on the amount of oil spilled.

Town residents have been advised to avoid the oil contaminated floodwaters, which have contaminated some buildings.

Oil traders have speculated the Coffeyville facility, which sources much of its crude oil from the NYMEX delivery point at Cushing, Oklahoma, could be shut for some time because the flooding probably damaged pumps and electrical equipment.

Eames said Coffeyville had no estimate on restart times as workers had not yet been able to estimate damage to some parts of the facility.

Refinery outages in the Cushing region have contributed to pushing WTI crude futures to a discount to North Sea Brent since February.

Refineries on the U.S. Gulf Coast damaged by floods caused by Hurricane Katrina in 2005 were shut for months although these restarts were complicated by extensive damage to regional electricity infrastructure as well as to workers' homes.

Coffeyville Resources LLC is owned by CVR Energy Inc., a private company controlled by Goldman Sachs and the Kelso funds. CVR had been expected to sell shares in an initial public offering later this year on the New York Stock Exchange.

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