* Other markers also strong relative to U.S. crude
* New physical oil supplies benchmarked off Brent
* "Scale-able" technology able to absorb rising volumes
By Barbara Lewis
LONDON, Jan 12 (Reuters) - Weakness in the main U.S. oil futures contract rather than unusual strength in Brent explains a wide gap between the two big benchmarks, a director of IntercontinentalExchange said on Wednesday.
Brent futures, traded primarily on ICE, reached a session high above $98 a barrel, their highest since September 2009, while U.S. crude hit a daily peak above $92.
By 1556 on Wednesday, the premium of Brent to U.S. crude, also known as West Texas Intermediate or WTI, was still more than $6 after stretching to more than $7 on Thursday, the most since February 2009.
"It's not that Brent is particularly strong, it's that WTI is particularly weak," said Mike Davis, director of market development at ICE Futures Europe.
He said U.S. crude was out of line with other crude markers such as Dubai, Louisiana Light Sweet and the Argus Sour Crude Index (ASCI).
ASCI, although a marker for sour crudes that theoretically should be discounted to higher quality U.S. light sweet crude, has risen to a premium to it, Davis said.
Some of the strength in Brent could melt away after the front-month contract expires on Friday, but analysts still expect it to trade above U.S. crude, which has been at a discount to Brent since August.
LANDLOCKED VERSUS WATERBORNE
U.S. crude is landlocked and can be depressed by high levels of inventory at Cushing, Oklahoma, the delivery point for U.S. futures.
Brent, in contrast, is waterborne and is more widely used as a physical benchmark, typically pricing around two-thirds of the world's physical crudes.
Crude futures volumes have risen across energy exchanges, but the increase has been particularly marked on ICE, where Davis said Brent volume had risen by nearly 50 percent in the last two years, while gasoil volume more than doubled.
The strength of gasoil as the marker for distillate products, such as heating oil and diesel, goes hand in hand with Brent strength.
Refining margins based on gasoil and compared with Brent "are the most reliable single indicator", said Davis.
"They are a very powerful tool for telling you what's happening."
RISING PHYSICAL POPULARITY
There were signs extra volumes of physical crude were being priced off Brent, Davis said, referring to crude grades in Australia, Indonesia and Sudan that are using Brent for the first time.
On the futures exchange, rising investor interest has helped to boost volumes of Brent trade as funds have followed the reweighting of commodity indexes towards Brent and away from U.S. crude, analysts have said.
Davis saw no immediate problem in increased volumes.
"The (ICE) technology is very scale-able," he said.
As futures volumes increase, underlying physical volumes of crude in the mature North Sea basin are declining and stand at around 1.2 million barrels per day.
McGraw Hill unit Platts, an assessor of crude and product prices, in the past bolted on other North Sea grades to Brent to widen the physical basis of Brent futures and deter trading plays.It has not ruled out further reforms.
For its part, ICE has a "position management programme", Davis said, allowing it to ask members to limit excessive positions if considered necessary.
(Editing by Jane Baird)