* Feb WCS trades at $18.00/bbl below WTI
* Feb synthetic trades at 90 cents/bbl above WTI
CALGARY, Alberta, Jan 17 (Reuters) - Canadian heavy crudeprices reached a 5-1/2 month high on Friday, helped by increaseddemand from refineries in the United States and Canada.
Western Canada Select heavy blend for February deliverylast traded at $18.00 per barrel below the West TexasIntermediate benchmark, according to Shorcan Energy brokers.
That was the narrowest differential since early August andcompares with a settlement price on Thursday of $18.25 perbarrel below the benchmark.
Increased processing capacity at the 130,000 barrel per dayfire-damaged Co-op refinery in Regina, Saskatchewan, helpedstrengthen demand. The facility is currently running at 90,000bpd, a spokesman said, having previously cut rates to 60,000 bpdfollowing an explosion and fire on Dec. 24.
BP Plc's 405,000 bpd Whiting, Indiana, refinery and CitgoPetroleum Corp's 175,000 bpd Lemont, Illinois, facility are alsoincreasing their intake of Canadian heavy crude over comingweeks.
Analysts said transport links between Alberta's oil sandsand refining markets in the United States were improving,alleviating concerns about booming crude production gettingbottlenecked in Alberta.
"While accessing the coveted refining region along the U.S.Gulf Coast will continue to be challenging for Canadian supply,the combination of more rail and pipeline capacity will help theCanadian heavy oil supply growth story from becoming anightmare," TD Securities analyst David Bouckhout said in a 2014outlook note.
Light synthetic crude from the oil sands for Februarydelivery weakened slightly, last trading at 90 cents per barrelabove WTI, compared with a settlement price of $1.65 per barrelabove the benchmark on Thursday.