Heavy crude discount edges wider

The Canadian heavy oil differential widened slightly against the West Texas Intermediate (WTI) benchmark on Tuesday, but remained below historically wide levels even as output continues to surpass transport capacity:

* Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty, Alberta, settled on Tuesday at $42.35 a barrel below WTI crude futures , compared with Monday's settle of $42, according to Shorcan Energy brokers.

* Light synthetic crude from the oil sands for December delivery settled at $30 under WTI, compared with Monday's settle of $29.50.

* The discount on Western Canadian crudes climbed to record levels this year as rising production outstripped pipeline capacity and new crude by rail capacity has not yet reached volumes needed to clear the glut.

* The differential has compressed in recent days because the WTI benchmark price has fallen, but realized prices for Canadian producers remain largely unchanged, analysts said.

* Global oil prices fell on Tuesday, with U.S. crude futures hitting an eight-month low, a day after Washington granted sanction waivers to top buyers of Iranian oil and as Iran said it has so far been able to sell as much oil as it needs.

(Reporting by Julie Gordon in Vancouver Editing by James Dalgleish)