Heavy crude differential narrows further to strongest in over a year

The Canadian heavy oil differential narrowed further against the West Texas Intermediate (WTI) benchmark on Tuesday, climbing to the strongest level in more than a year, after Alberta said it would require producers to curtail output to clear a glut:

* Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, was last seen at about $11.75 a barrel below WTI crude futures , narrower than Monday's level at about $12.25 a barrel discount, according to traders. The differential narrowed to as little as $10 during the day, which was the strongest level since mid-September 2017.

* Light synthetic crude from the oil sands for December delivery was seen at about $2.50 under WTI, dealers said.

* Alberta Premier Rachel Notley said last week her government would force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), until excess crude in storage is reduced.

* The measure "is necessary to help reduce the relatively small oversupply of oil that led to record-high light-heavy oil price differentials and a collapse in the price of WCS in late 2018," Cenovus Energy Inc said, adding that the expected improvement in WCS prices as a result of the curtailments would have a "significant positive impact on its adjusted funds flow in 2019."

(Reporting by Devika Krishna Kumar in New York; Editing by Peter Cooney)