Sept 5 (Reuters) - The discount on Western Canada Select

to North American benchmark West Texas Intermediate futures

narrowed slightly on Friday.

WCS for October delivery in Hardisty, Alberta, settled at

$11.50 a barrel under the U.S. benchmark WTI, according to

brokerage CalRock, compared with $11.55 a barrel discount on

Thursday.

* WCS discounts have been narrower so far in September than

in

August, due in part to the restart of BP's

440,000-barrel-per-day refinery in Whiting, Indiana, which had

been affected by flooding after a severe thunderstorm. The

refinery is often the single largest purchaser of Canadian

crude.

* Canadian crude is also seeing strong buying demand from

Asia,

said Wood Mackenzie analyst Dylan White.

* Still, WCS discounts are not expected to be as narrow in

the

second half of the year as they were this spring. Western

Canadian crude production continues to grow, with the

oil-producing province of Alberta hitting a new record of 4.3

million barrels per day in July. Increased output will drive

increased utilization of the country's export pipelines,

analysts say.

* Another factor supporting increased widening is the threat

of

competition from Venezuelan heavy crude exports to the U.S. Gulf

Coast, which resumed last month due to easing of U.S. sanctions.

* Oil prices fell on Friday as a weak U.S. jobs report

dimmed the

outlook for energy demand, while swelling supplies may grow

further after OPEC and allied producers meet over the weekend.