CANADA FX DEBT-C$ builds marginally on Monday's rally as oil prices climb

* Canadian dollar rises 0.1 percent against the greenback

* Price of U.S. oil rises 1.2 percent

* Canadian bond prices trade mixed across flatter yield curve

* Canada-U.S. 10-year spread narrows by 3.4 basis points

TORONTO, Dec 4 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Tuesday, adding modestly to its gains from the day before as crude oil prices rallied and the greenback broadly fell. The price of oil, one of Canada's major exports, extended this week's gains ahead of expected output cuts by the Organization of the Petroleum Exporting Countries and a reduction in Canadian supply.

U.S. crude prices were up 1.2 percent at $53.58 a

barrel. The discount on Western Canada Select was slashed on Monday after Alberta Premier Rachel Notley said over the weekend that the government would force producers to cut output by 8.7 percent until excess crude in storage is reduced.

The U.S. dollar declined against a basket of major

currencies, pressured by a decline in U.S. Treasury yields.

At 9:03 a.m. (1403 GMT), the Canadian dollar was

trading 0.1 percent higher at 1.3190 to the greenback, or 75.82 U.S. cents. The currency traded in a range of 1.3164 to 1.3201. On Monday, the loonie climbed to its highest in nearly two weeks at 1.3160 after the United States and China agreed to a 90-day truce in their trade war, boosting the outlook for the global economy. But stocks retreated on Tuesday as investors turned skeptical of the chances of a breakthrough in the U.S.-China trade talks. The Bank of Canada has worried that the conflict is weighing on global growth and commodity prices. It is due to announce a policy decision on Wednesday. A strong majority of economists polled by Reuters said the central bank will wait until early next year before it raises interest rates again and that two more rate rises will follow by end-2019. Canada's trade report for October is due on Thursday and the November employment report is due on Friday. Canadian government bond prices were mixed across a flatter

yield curve, with the two-year down 1.5 Canadian cents to yield 2.167 percent and the 10-year flat to

yield 2.236 percent. The gap between Canada's 10-year yield and its U.S. counterpart narrowed by 3.4 basis points to a spread of 72.1 basis points in favor of the U.S. bond.

(Reporting by Fergal Smith; Editing by Bernadette Baum)