Commodity Group Urges CFTC to Block Kalshi Oil Contract

A group representing major US commodity exchanges has urged the Commodity Futures Trading Commission to reject Kalshi’s proposed oil perpetual futures contract over concerns about market integrity. According to Bloomberg, the Commodity Markets Council, whose members include CME Group and other established derivatives exchanges, warned the regulator against approving the product.

Proposed Contract Structure

Kalshi filed for the product, known as WTIPERP, on October 20. The proposed contract would allow traders to maintain exposure to West Texas Intermediate crude oil prices without a fixed expiration date, using a reference calculated from two nearby futures contracts traded on the New York Mercantile Exchange. Each cash-settled contract would represent 100 barrels of oil, compared with 1,000 barrels in a standard WTI futures contract.

The Commodity Markets Council questioned whether perpetual contracts can maintain the same connection to physical commodity markets as conventional futures approaching delivery. Traditional futures prices generally converge toward physical market prices, whereas perpetual contracts rely on daily funding payments to align trading prices with reference prices.

Offshore Platforms and Regulatory Scrutiny

The industry group also asked US regulators to restrict retail access to offshore derivatives platforms through virtual private networks. The council raised concerns regarding manipulation, market oversight, and sanctions compliance in decentralized derivatives trading.

Meanwhile, Kalshi faces separate legal challenges from US states over its event and prediction markets. Utah Attorney General Derek Brown filed a civil lawsuit seeking to recover up to $61.2 million in allegedly unlawful fees from the platform.

Key facts

• The Commodity Markets Council urged the CFTC to reject Kalshi’s proposed WTIPERP oil contract.
• Kalshi filed for the WTI crude oil perpetual product on October 20.
• Each proposed WTIPERP contract represents 100 barrels of oil.
• Utah filed a civil lawsuit seeking up to $61.2 million in fees from Kalshi.