(Corrects month in first bullet point to June from March)
* WTI volume hits 13.1 mln in June vs. 11.6 mln in Brent
* First time WTI volume has surpassed Brent in 15 months
* Volume increases as Brent-WTI spread narrows sharply
By David Sheppard and Jonathan Leff
NEW YORK, July 3 (Reuters) - Trading in CME Group's benchmark U.S. crude oil contract surpassed IntercontinentalExchange Inc's North Sea Brent in June for the first time in 15 months as the huge price difference between the two contracts collapsed.
The move halts a three-year trend that has seen CME cede ground to ICE in crude oil trading, as soaring North American production flooded the delivery point of the flagship New York Mercantile Exchange (NYMEX) contract and disconnected it from global prices.
The NYMEX U.S. crude oil contract, known as West Texas Intermediate or WTI, traded more than 13.1 million lots in June, data from the CME Group showed. At the same time, ICE data shows Brent traded 11.6 million lots, falling below WTI for the first time since March 2012.
Trading in WTI has been boosted as its discount to Brent - known to oil traders as the Brent-WTI spread CL-LCO1=R - has narrowed from more than $20 a barrel in February to less than $5 a barrel this week.
That increases the likelihood that international oil producers and major consumers like airlines will consider moving their global hedging programs back toward the U.S. contract, which dominated oil trading for two decades.
"We saw a tremendous migration from WTI to Brent in recent years, but now the spreads have come in we're seeing it coming back," said Andy Lebow, an oil broker at Jefferies Bache in New York.
"It's too early to say if it's going to become the world's benchmark again, but now it's better connected to global markets it's going to regain some trust with international producers again."
U.S. crude prices have risen relative to Brent in recent months as projects to divert oil supplies away from the WTI contract's Cushing, Oklahoma, delivery hub are anticipated to start draining stocks in the second half of this year.
"As infrastructure has been built out over the last few years, WTI crude oil and WTI look-alikes from the Midcontinent are now supplying all of the refining regions in North America, including the U.S. Gulf Coast," Damon Leavell, spokesman for the CME Group, said in an email.
On Wednesday the Brent-WTI spread hit a three-year low of just $3.09 a barrel before widening to settle around $4.50.
On Tuesday, WTI trading volume rose to more than 1 million contracts in just one session for the first time since February 2012.
In the last 15 months ICE Brent volume has averaged 12.9 million contracts a month compared with 11.9 million in the NYMEX benchmark.
Trading volume in NYMEX WTI remains about 6 percent below the second quarter level of 2011, CME data shows, when an average of more than 14 million contracts traded each month.
The U.S. oil boom has helped maintain WTI volumes, while the contract's historic liquidity and familiarity has also kept many funds and other traders actively trading WTI.
ICE Brent volumes in the second quarter were up by almost 5 percent on last year and were almost 30 percent above the level seen during the same period in 2011.
A spokesperson for ICE was not immediately available to comment.
While the Brent-versus-WTI battle plays out, the two exchanges are also working to claim market share in their rival's flagship contracts - with new signs this year that the CME is finally making in-roads into Brent trading.
Volumes in the CME Group's so-called "Brent Crude Oil Last Day Financial Futures" contract have surged in the last six months. In June, volume in CME Brent reached 916,000 contracts, 10 times 2012 norms.
ICE's version of WTI succeeded years ago in carving out a chunk of U.S. crude oil trade, but that growth had slowed until this week when the market's focus shifted back to the United States.
On Tuesday ICE's WTI contract volume hit more than 300,000 contracts, the highest level since February 2012. (Additional reporting by Jonathan Leff in New York; Editing by Jim Marshall)