CFTC Weighs Blocking CME’s 24-Hour Crude Futures

The U.S. Commodity Futures Trading Commission is considering whether to block CME Group’s planned rollout of 24-hour crude oil futures trading, Bloomberg reported.

A senior CFTC official, who asked not to be identified because the discussions are private, said June 12 that CME’s surprise announcement of 24-hour crude futures trading caught regulators off guard. The official declined to provide a detailed position, citing ongoing nonpublic discussions.

Round-the-clock crude trading may be inappropriate because it could intensify already severe market volatility during geopolitical crises, the official said. Those concerns could provide grounds to withhold approval of the contract. A CME spokesperson declined to comment.

CME’s new crude-linked contract will be one-tenth the size of the existing Micro WTI futures contract and is scheduled to launch on Aug. 30. The exchange also plans to start 24-hour trading in 1-ounce gold futures on July 26. Both products remain subject to final regulatory review.

The matter comes just a week after CME Chief Executive Officer Terry Duffy criticized the CFTC’s move to allow perpetual futures tied to digital assets. Duffy said at the time that he had “serious concerns” about the regulator’s approval of the first perpetual futures product linked to crypto assets.

Unlike traditional futures contracts, perpetual futures allow traders to take leveraged positions on an asset’s future price without an expiration date. The CFTC said at the time that it would review perpetual futures applications on a case-by-case basis and that some assets are not appropriate for such products.