Heavy Oil Discount Little Changed as Trading Cycle Begins

* The discount on WCS for February delivery in Hardisty, Alberta, began trading at $19.35 a barrel under WTI, dropping to $18.55, according to brokerage CalRock. The January contract had been trading between $18.50 and $18.90 a barrel last month before the trading cycle ended.

* Market players are concerned about potential delays to the 590,000 barrel-per-day Trans Mountain expansion project, with the government-owned pipeline company asking regulators to allow a change in construction.

* The additional capacity is expected to support WCS prices, with forward price curves indicating a reduced discount by mid-year, said ATB Capital Markets analyst Patrick O’Rourke.

* Trans Mountain pipeline nominations are apportioned by 24% in January.

* Global benchmark oil prices dropped on interest rate jitters and as concerns eased that tensions in the Red Sea could disrupt supplies.

(Reporting by Rod Nickel in Winnipeg, Manitoba)