CANADA CRUDE-Differentials rise to two-month highs on wildfire outages

* June WCS trades at $12.75/bbl below WTI * June synthetic trades at $1.00/bbl above WTI (Adds milestone, updates latest prices, adds analyst quote) By Nia Williams and Catherine Ngai CALGARY, Alberta, May 4 (Reuters) - Canadian cash crudedifferentials climbed to the highest in two months on Wednesdayas a wildfire raging in Fort McMurray in the heart of Alberta'svast oil sands region forced some projects to cut output,offsetting concerns about a growing global glut. The city's population of around 88,000 was ordered to leaveimmediately on Tuesday evening as the fire breached city limitsand ripped through some neighborhoods. Although the blaze is not directly threatening anyfacilities in the vast oil sands, which hold the world'sthird-largest crude reserves after Saudi Arabia and Venezuela,it disrupted some operations. Suncor Energy Inc said it was reducing regionalproduction and Royal Dutch Shell PLC said it wasshutting down its two oil sands mines. Connacher Oil and Gas Ltd said production was cut at its Great Divide operation. "If it (the production cuts from the fire) starts dragginginto a week or so, the impact will become more acute," saidFirstEnergy Capital analyst Martin King. Other companies operating nearby including Canadian NaturalResources Ltd and CNOOC Ltd subsidiary NexenEnergy said their operations were not affected. The reduced oil sands production helped prop up benchmarkCanadian cash grades, as well as put a support under globalprices, though analysts and traders said the boost would likelybe short lived. "My feeling is that this has minimal impact on productionlonger term," said Tim Pickering, founder and chief investmentofficer at Auspice Capital Advisors in Calgary. "When we thinkabout taking production offline, there's still a significantamount of oil in storage. That's a big cushion." Western Canada Select heavy blend crude for June delivery last traded at $12.75 a barrel under the West TexasIntermediate benchmark, the narrowest discount since the startof March, according to Shorcan Energy brokers. It settled on Tuesday at $13.35 per barrel under WTI. Light synthetic crude from the oil sands for June delivery last traded at $1.00 a barrel above U.S. crudefutures, the strongest since the start of April, comparedwith a 5-cent discount the previous day. (Editing by Meredith Mazzilli and Alan Crosby)