U.S. Regulatory Agency Plans to Block CME from Launching 24-Hour Oil Futures Contract Application

BlockBeats News, July 9th, the U.S. Commodity Futures Trading Commission (CFTC) plans to block the Chicago Mercantile Exchange (CME) from launching a fast-track all-hours (24x7) oil contract, citing concerns that the energy market is not ready to handle a surge of round-the-clock derivatives.

In June, CME announced plans to offer round-the-clock trading for a futures contract tied to WTI crude oil in units of 10 barrels, citing investor demand to be able to manage their positions "at any breaking news." On Wednesday, CME submitted a self-certification application for this new product, giving the CFTC only one day to intervene before the contract could go live. Sources familiar with the matter revealed that the CFTC intends to block CME's self-certification.

CFTC Chairman Heath Tarbert has met with executives from energy companies such as Shell, Vitol, BP, and ExxonMobil in recent weeks. Another application for the same product submitted by CME, which requires a 45-day review period, is still under regulatory consideration.