Heavy Oil Discount Tightens Further

* WCS for February delivery in Hardisty, Alberta, settled at $17.50 a barrel under WTI, according to brokerage CalRock, having settled at $17.95 a barrel under the U.S. benchmark on Monday.

* Heavy crude prices have strengthened since the Canada Energy Regulator approved a variance request from the Trans Mountain pipeline expansion project (TMX) late on Friday, clearing the way for the completion of the long-delayed 590,000 barrel-per-day expansion.

* “The decision is a huge relief, not only for TMX… but also for producers and shippers on the pipeline who desperately need incremental takeaway out of the basin,” TPH Energy Research analysts said in a note, adding that TMX hoped to begin filling the pipeline with crude by the end of March.

* Global oil prices were little changed, pressured as the dollar jumped to its highest in a month but supported by jitters about the impact to energy supplies from escalating tensions in the Middle East.

(Reporting by Nia Williams in British Columbia; Editing by Subhranshu Sahu)