Key insights
- The CFTC is considering blocking CME's proposed 24/7 crude oil and gold futures contracts due to concerns about increased volatility, especially during geopolitical stress. This regulatory scrutiny could impact trading dynamics in key commodity markets, though the direct influence on US equities is currently limited as it pertains to futures contracts rather than underlying equity prices.
Investing.com -- The U.S. Commodity Futures Trading Commission is considering whether to block CME Group’s proposal to launch a round-the-clock crude oil futures contract, according to a Bloomberg report citing a senior agency official familiar with the matter.
CME announced Thursday that it plans to introduce 24-hour, seven-day-a-week trading for certain crude oil and gold futures contracts.
According to the report, regulators are concerned that continuous trading in crude oil futures could exacerbate volatility during periods of geopolitical uncertainty and market stress.
The proposed oil contract would be one-tenth the size of CME’s existing Micro WTI futures contract and is scheduled for launch on Aug. 30, subject to regulatory approval.
CME also plans to begin round-the-clock trading in its 1-ounce gold futures contract on July 26. Both products require review by the CFTC before they can be introduced.
A CME spokesperson declined to comment on the report.
The development comes a week after CME Chief Executive Terry Duffy raised concerns about the CFTC’s decision to allow trading in perpetual cryptocurrency futures contracts, known as "perps."
The CFTC has said it evaluates perpetual futures applications on a case-by-case basis and that certain assets may not be appropriate for the product structure.
Perpetual futures are widely used in crypto markets and are the primary trading instrument on Hyperliquid, where trading volumes in oil-linked products have increased amid volatility tied to the conflict between Iran and Israel.
The report also noted that CME and Intercontinental Exchange have previously urged regulators to take a closer look at unregulated trading venues offering similar products.
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