CFTC Considers Blocking CME’s 24/7 Oil Contract Bid
(Bloomberg) -- The US Commodity Futures Trading Commission is considering whether to block CME Group Inc.’s bid to launch a round-the-clock oil contract, heightening tensions between the market stalwart and its regulator.
CME Group Inc. announced on Thursday that it would debut 24-hour, seven-days-a-week trading in some crude and gold futures contracts. The news caught the US derivatives regulator by surprise, a senior agency official said, who asked not to be identified discussing confidential deliberations.
Round-the-clock trading may not be suitable for crude oil because it could worsen already extreme volatility during periods of geopolitical stress, the official said, adding those concerns may justify withholding approval for the contract.
A CME spokesperson declined to comment.
The new oil-linked contract, which would be one-tenth the size of the existing Micro WTI futures contract, is slated for release on Aug. 30. The exchange wants to start round-the-clock trading in 1-ounce gold futures on July 26. Both products require regulatory review.
The exchange’s move comes a week after CME Chief Executive Officer Terry Duffy voiced “grave concerns” about the CFTC clearing a path for trading in the first perpetual futures, or “perps,” tied to cryptocurrencies. These contracts allow traders to take leveraged positions on an asset’s future price without the expiration dates that govern traditional futures contracts.
At the time, the CFTC said it would evaluate perpetual futures applications on a case-by-case basis and that some assets were unsuitable for the product. The agency has previously tolerated 24/7 trading in commodity-linked products on platforms like Kalshi.
Perpetual futures are the primary trading instrument on Hyperliquid, a crypto platform that has seen volumes in oil-linked products surge as the Iran war roils energy markets.
Bloomberg previously reported that Intercontinental Exchange Inc. and CME were pressing US regulators to rein in the unregulated trading venue.
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