Heavy crude discount narrows as market eases into correction

The Canadian heavy oil discount narrowedon Friday against the West Texas Intermediate (WTI) benchmark,as the market slowly corrected from its widest level in morethan four years, reached last month.

* Expanding oil production in Alberta, coupled with tightpipeline and rail capacity to move it, has increased thediscount since late last year.

* The differential, which has historically hovered around$15 per barrel, is more likely to narrow to between $19-$20 in2018, according to Tudor Pickering Holt & Co analyst MattMurphy.

* Western Canada Select (WCS) heavy blend crude for Aprildelivery in Hardisty, Alberta, settled at $24.35 a barrel belowthe WTI benchmark crude price , according to ShorcanEnergy brokers, compared with Thursday's settle of $24.75.

* The Alberta government on Wednesday estimated that thedifferential was costing the province's heavy oil producers C$30million to C$40 million in revenue per day.

* Light synthetic crude from the oil sands for Aprildelivery last traded at $2.10 over WTI, a bigger premium thanThursday's settle of $1.75 over WTI.

(Reporting by Rod Nickel in Winnipeg, Manitoba; editing by GCrosse)