Sept 3 (Reuters) - Canadian heavy crude's discount versus West Texas Intermediate (WTI) narrowed on Thursday the most since mid-July, with production halted from a major oil sands site due to a pipeline leak.
* Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, traded at $8.95 per barrel below WTI, according to NE2 Canada Inc. It settled the previous day at $9.35 under.
* The differential moved as narrow as $7.50.
* An outage on part of the Polaris diluent pipeline is the main factor narrowing the heavy differential and clarity on restart will likely widen it out, a Calgary-based trader said.
* Imperial Oil Ltd IMO.TO said it had shut all production at its 220,000-barrel-per-day (bpd) Kearl oil sands site in Canada due to an outage of part of the Polaris pipeline in Alberta following a spill. A fire at Suncor Energy 's SU.TO base plant last month also affected its production, further limiting Alberta supplies, the trader said.
* Canadian oil sands companies have been restoring production that had been shut in after the coronavirus pandemic spread and curbed demand from refineries.
* Peters & Co forecast oil supplies will rise to pipeline capacity in the next few months, increasing reliance on rail, and causing differentials to widen into the fall.
* Light synthetic oil from the oil sands for October delivery traded at $2.30 below WTI, narrower than the previous day's settle of $2.70.
* Global oil prices settled lower as U.S. unemployment data fed fears of a slow recovery for the economy and fuel demand a day after weak U.S. gasoline demand data. O/R
* Canadian crude oil exports to the United States rose 440,000 barrels per day (bpd) in July to 3.43 million bpd - Statistics Canada.