Heavy crude discount stays within recent range, capacity tight

The Canadian heavy oil discountnarrowed slightly on Monday against the West Texas Intermediate(WTI) benchmark, but remained in its recent range as takeawaycapacity remains tight, creating a supply glut in theoil-producing province of Alberta.

* Western Canada Select (WCS) heavy blend crude for Aprildelivery in Hardisty, Alberta, settled at $25.25 a barrel belowthe WTI benchmark crude price , according to ShorcanEnergy brokers, compared with Friday's settle of $25.55.

* The discount reflects expanding Alberta oil production andtight capacity on pipelines and railways.

* The glut of barrels stranded in Western Canada will remainuntil a deal can be brokered between the shippers and the railcompanies to unlock Canadian heavy crudes and ship them to theU.S. Gulf, said Michael Tran, energy strategist at RBC CapitalMarkets.

* An expected return of TransCanada Corp's Keystonepipeline to full pressure, following a November leak, would helpreduce the discount, traders have said.

* Light synthetic crude from the oil sands for Aprildelivery last traded at $3 over WTI, in line with Thursday'ssettle of $3.

(Reporting by Julie Gordon in Vancouver; Editing by PeterCooney)