ChainCatcher, citing Bloomberg, reported that the U.S. Commodity Futures Trading Commission (CFTC) is reviewing an application from CME Group to launch around-the-clock crude oil contracts and is considering whether to block the plan. The issue before the regulator is not only an extension of trading hours, but also whether crude oil is an appropriate asset for a market structure that runs continuously.
CFTC Official Points to Volatility During Geopolitical Stress
A senior CFTC official said that around-the-clock trading may not be suitable for crude oil, because during periods of geopolitical tension it could intensify volatility that is already extreme. The statement places the focus on the characteristics of the crude oil market itself and on how regulators assess product design when trading is available seven days a week and 24 hours a day.
CME announced last Thursday that it planned to introduce crude oil and gold futures contracts that would trade 24 hours a day, seven days a week. According to the report, that announcement came as a surprise to the CFTC. The new crude contract would be one-tenth the size of CME’s existing Micro WTI futures contract and is scheduled to go live on August 30, but the product still requires regulatory review before launch.
Crypto Perpetual Contract Review Sits in the Background
The crude oil application comes one week after CME’s chief executive expressed “serious concerns” about the CFTC clearing the way for cryptocurrency perpetual contracts. Perpetual contracts are associated with the crypto derivatives market, and the regulator’s approach to these products forms part of the broader context for the latest review.
The CFTC has said it will evaluate perpetual contract applications on a case-by-case basis, and that certain assets may not be suitable for the product. In that setting, CME’s proposal links traditional commodity futures, gold futures and crypto derivatives oversight within the same regulatory conversation. Whether CME’s around-the-clock crude oil contract can proceed on the planned August 30 timetable depends on the outcome of the CFTC review.