Valero Energy chairman and chief executive Bill Klesse said he expects the differential between Brent and West Texas Intermediate (WTI) crude oils to remain below $18 a barrel in 2011.

“I honestly don’t believe we’re going to have an $18 differential this year,” Klesse said in a webcast conference with Wall Street analysts.

The high premium Brent carries over the US benchmark WTI, which settled at $14.35 a barrel, could be repeated next winter if a glut of WTI is repeated at the US oil storage hub in Cushing, Oklahoma.

Reducing the glut will require either a new pipeline to move crude out of Cushing or bypassing the storage hub and sending crude by rail directly to refineries around the country. Demand in 2011 is not expect to come from US, where Valero is the leading independent refiner. “The growth in the world is the developing countries,” Klesse said. “US demand has been very sluggish,” Klesse added. “It’s really more of a world story.”

Valero continues to looks for ways to expand its geographic footprint in the Atlantic basin trade. “We also see opportunities in Europe,” Klesse said. With $3 billion in cash on hand, Valero expects any refinery it chooses to buy would be paid for from those reserves.

Asked if BP’s refineries in Texas City, Texas, and Carson, California, which are up for sale, were appealing, Klesse was noncommittal.