August 3, 2011 / 1:42 PM / 7 years ago

UPDATE 1-WTI no longer reflects global oil price--ICE CEO

* Brent, WTI price divergence may continue—Sprecher

* ICE’s Brent contract shot to record highs this year (Adds background, quotes, byline)

By Jonathan Spicer

NEW YORK, Aug 3 (Reuters) - The head of futures exchange IntercontinentalExchange Inc (ICE.N) said Wednesday the WTI crude contract no longer reflected global oil prices, adding that the price divergence from the Brent contract “may continue for some time.”

“While WTI remains an important U.S. oil benchmark to us, it no longer reflects global prices,” ICE Chief Executive Jeffrey Sprecher said in a conference call with analysts and reporters.

Atlanta-based ICE owns the Brent contract while rival exchange CME Group Inc (CME.O), of Chicago, owns the NYMEX WTI contract.

Brent crude has shot to record high premiums over $20 a barrel to U.S. oil futures, also known as West Texas Intermediate (WTI), this year. Brent ended 2010 with a premium of around $3 to WTI.

Rising volumes of crude from Canada and from U.S. shale oil plays have swamped inventories in the U.S. Midcontinent, and especially the Cushing, Oklahoma delivery point of the WTI contract, where capacity to ship that crude to other refining centers is limited.

This has dragged down prices for the U.S. contract relative to Brent, which has found strength from supply disruptions from Libya.

“Brent’s fundamentals, customer composition, and forward term structure differ from WTI,” Sprecher added.

“These are some of the reasons why the price spread between Brent and WTI has persisted, and the divergence may continue for some time.” (Additional reporting by Matthew Robinson; Editing by John Picinich)

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