* Sept WCS trades at $19.40/bbl below WTI
* Sept synthetic trades at $4.25/bbl below WTI
By Nia Williams
CALGARY, Alberta, Aug 10 (Reuters) - Canadian heavy crudedifferentials hit their widest level in a year on Monday after amajor refinery in the U.S. Midwest suffered a malfunction overthe weekend, dragging the outright of Canadian crude to lessthan $26 a barrel.
Western Canada Select heavy blend crude for Septemberdelivery last traded at $19.40 per barrel below the West TexasIntermediate benchmark, according to Shorcan Energy brokers.
That was the widest differential since last August, andcompares with a settlement price of $17.75 per barrel below WTIon Friday.
BP Plc's refinery is repairing the largest crudedistillation unit at the company's 413,500 barrel per dayWhiting, Indiana, refinery after a malfunction shut it down, twosources said on Monday.
Whiting is one of the largest consumers of Canadian heavycrude in the Midwest and differentials widened sharply astraders reacted to the disrupted demand.
The discount on WCS has been widening steadily since June onhigher oil sands production, primarily due to the ramp up ofImperial Oil's Kearl expansion project, and reduceddemand because of maintenance at refineries and upgraders.
Some market participants said the differential could remainunder pressure in coming weeks as refinery turnaround seasongets underway.
"With the asphalt season winding down over the next twomonths we expect heavy oil differentials to remain relativelywider," BMO Capital Markets analyst Randy Ollenberger said in anote.
The wider differential outweighed a rise in U.S. crude and pushed the outright price of Canadian heavy to around$25.56 a barrel, within sight per barrel operating costs formany producers in Western Canada.
Light synthetic crude from the oil sands for Septemberdelivery last traded at $4.25 per barrel below WTI, wideningfrom Friday when it traded at $3.95 per barrel below thebenchmark. (Editing by David Gregorio)
BP (BP.)
