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* At least four producers cut output * June WCS trades at $11.50/bbl below WTI By David Gaffen NEW YORK, May 5 (Reuters) - Canadian heavy crude physicalprices hit their strongest level since February on Thursday, asthe raging wildfire in northern Alberta shuttered nearlyone-third of the nation's oil sands production and closed keypipelines. The wildfire in Fort McMurray, at the core of Alberta's oilsands region, has forced numerous oil sands operators, includingSuncor Energy Inc, Shell Canada and others to reduce productionas workers were moved to safety. The entire population of 88,000 people in Fort McMurray wasordered to evacuate as the fire worsened. The blaze has disrupted some oil operations but is notdirectly threatening any facilities in the vast oil sands, whichhold the world's third-largest crude reserves after Saudi Arabiaand Venezuela. An estimated 640,000 barrels per day is offline, accordingto Reuters estimates, with the largest outage coming from SuncorEnergy Inc, which shut a base plant that carries acapacity of about 350,000 barrels of oil per day. The Canadianoil sands produce about 2.2 million barrels a day. Western Canada Select heavy blend crude for June delivery at one point traded at $11.50 a barrel under theWest Texas Intermediate benchmark, according to Shorcan Energybrokers. That was the narrowest discount since late February andsignificantly tighter than Wednesday's settlement of $12.70 abarrel under U.S crude. WCS was last at $12.05 a barrel underU.S. crude. Light synthetic crude from the oil sands for June delivery also rallied hard on Wednesday to $1 a barrel overthe benchmark and on Thursday was bid at $1.10 a barrel over WTIand offered at $1.85 a barrel above, with no trades reported yetby Shorcan. The fire also has caused a notable move in benchmark WestTexas crude, which has rallied by 4 percent to $45.43 a barrel,fueling expectations that the outages will erode the U.S. supplyglut. "I wouldn't have expected the price to be moving quite asmuch as this but it may be a concern about how this could growfrom where we see it right now," said Jackie Forrest, vicepresident in energy research at ARC Financial Corp in Calgary.