CANADA-CRUDE-Discount on Western Canada Select narrows

Jan 12 (Reuters) - The discount on Western Canada Select to North American benchmark West Texas Intermediate futures CLc1 narrowed on Monday.

WCS for February delivery in Hardisty, Alberta, settled at $14.35 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $14.80 a barrel on Friday.

The discount on 2026 WCS at Hardisty forward curve has widened more than $2 a barrel through the end of the year, with a similar widening for WCS barrels landing in Houston, since the U.S. capture of Venezuelan President Nicolas Maduro last week.

The market is watching for the potential for an increase in Venezuelan barrels to compete with similar-in-quality Canadian heavy oil in the U.S. Gulf Coast over the longer term.

But some analysts have suggested the market thus far may have overreacted, given it will take years for Venezuela to significantly ramp up its oil production beyond current levels.

Canada has other factors working in its favour that could help prop up WCS prices if they come under pressure, TD Cowen said, including low oil inventories in the province of Alberta, a depleted U.S. Strategic Petroleum Reserve, and the prospect for Chinese refiners to replace Venezuelan supply with Canadian cargoes.

Oil prices climbed and settled at seven-week highs on Monday on worries that Iran's exports could decline as the sanctioned OPEC member cracks down on anti-government demonstrations.