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* At least four producers cut output * June WCS trades at $11.50/bbl below WTI (Adds details on disruptions, quotes, updates prices) By David Gaffen NEW YORK, May 5 (Reuters) - Canadian heavy crude physicalprices hit their highest levels since February on Thursday, as araging wildfire in northern Alberta shuttered nearly one-thirdof the nation's oil sands production and closed key pipelines. ConocoPhilips became the latest oil company toevacuate operations near the city of Fort McMurray on Thursdayas the massive blaze spread south, covering a larger swath ofAlberta's key oil sands region. At least 640,000 barrels per day of crude output is offline,according to Reuters calculations, out of Canada's total oilsands production of 2.2 million barrels a day. So far, the wildfire has forced seven oil sands operators,including Suncor Energy Inc, Shell Canada andothers to reduce production as workers were moved to safety. Italso stymied transportation of crude and feedstocks normallydelivered via trains, pipelines and roads. Earlier this week, the entire population of 88,000 people inFort McMurray was ordered to evacuate as the fire grew,incinerating dozens of homes. The forecast has called for cooler temperatures and apossibility of rain, offering hope that controlling the blazecould become easier. More than 20 oil operations are clustered in a 100-kilometer(60-mile) radius of the city, according to government data,located within the vast Athabasca oil sands in Alberta. The blaze disrupted some oil operations, but is not directlythreatening any facilities in the vast oil sands, which hold theworld's third-largest crude reserves after Saudi Arabia andVenezuela. The largest outage is from Suncor Energy, which shut a baseplant with a capacity of about 350,000 barrels of oil per day. Nexen Energy, a wholly owned subsidiary of China's CNOOC, said late on Wednesday evening that it was shuttingdown its Long Lake oil sands facility, which had been operatingat reduced capacity, to ensure staff safety. 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 $12.15 a barrel underU.S. crude. However, the rally in Canadian crude is not as dramatic aslast year, when it rose to within $7 of U.S. crude. Currently,several facilities, including those operated by Suncor andShell, had already reduced production due to maintenance priorto the fire's eruption. "There's lots of turnarounds going on up there so I don'tknow if it screwed up that many people. All that stuff waspriced into the market already," said a Calgary-based oiltrader. The Canadian oil sands produces more than half of totalCanadian crude production of 3.9 million barrels a day; theshutdowns therefore account for about 16 percent of totalCanadian crude. Light synthetic crude from the oil sands for June delivery rallied hard on Wednesday to $1 a barrel over thebenchmark. On Thursday, it 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 rallied by as much 4 percent, fuelingexpectations that the outages will erode the U.S. supply glut.Lately, crude was trading at $44.90 a barrel, up 2.6 percent. "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. Several U.S. refiners that use Canadian crude said that sofar they did not see an impact in terms of deliveries. BP Plc said it did not expect any affect onproduction at its U.S. refineries due to possible shortfalls inCanadian supplies, a source familiar with BP's operation said onThursday. The U.S. imports about 3.5 million barrels of Canadian crudeper day. (Additional reporting by Catherine Ngai in New York, Erwin Sebain Houston and Nia Williams in Calgary; Editing by Alan Crosby)