CANADA-CRUDE-Discount on Western Canada Select widens

July 2 (Reuters) - The discount on Western Canada Select to the North American benchmark West Texas Intermediate futures CLc1 widened on Wednesday.

WCS for August delivery in Hardisty, Alberta, settled at $10.05 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, compared with $9.95 a barrel in Monday's trade, the day before the July 1 Canada Day holiday.

• Summer and the return of road construction season is a seasonally strong time of year for Canadian heavy crude, which is used by U.S. refiners to produce asphalt.

• Analyst Rory Johnston, founder of the Commodity Context newsletter, said he expects WCS to continue to trade within a tight band this summer. Canadian heavy crude has consistently traded at a tight discount this year in part due to the opening of the Trans Mountain pipeline expansion, which boosted the country's oil export capacity to Asian markets, including China.

• Johnston said one factor to watch is the ongoing ramp-up of Mexico's 340,000 bpd capacity Dos Bocas refinery, which when fully operational will exert demand pressure on North American heavy crude grades.

• "We already have a very tight North American heavy market, and the only thing that could really further contribute to tightening there is the proper ramp-up of Dos Bocas," Johnston said.

• Global oil prices rose 3% on Wednesday as Iran suspended cooperation with the U.N. nuclear watchdog and the U.S. and Vietnam reached a trade deal, but a surprise build in U.S. crude supplies limited price gains somewhat.

• Wednesday was the start of the Canadian crude market's trade cycle, which runs from the first of each month until the day before pipeline nominations are due, and in which the bulk of trading activity takes place.