Commodity Giants Urge CFTC to Kill Kalshi’s Oil Perp Before It Launches

Kalshi’s bid to bring crypto-style perpetual futures to the physical oil market has triggered an instant revolt from commodity incumbents.

The prediction-market platform filed for a NYMEX-linked WTI perpetual contract on 20 October, a coalition of legacy exchanges and energy hedgers, including CME and ICE, urged US regulators to shut the door on the product on 22 October.

How Kalshi’s Oil Perpetual Would Work

Kalshi proposes an oil future called WTIPERP with no expiry date. It would let traders hold a position without rolling it into a new contract each month.

To keep the perpetual contract tied to the conventional oil market, Kalshi would calculate its reference price from two nearby NYMEX WTI futures.

The calculation would maintain a constant one-month horizon as delivery months change, while daily funding payments would help keep WTIPERP’s trading price close to that reference.

The link to the existing market would also determine when WTIPERP can trade. It would follow standard oil-futures hours, closing over weekends and observing the same holidays and early closures.

Trading could pause if the underlying market halted. Each cash-settled contract would represent 100 barrels, one-tenth of a standard oil future.

For position limits, Kalshi would convert holdings into equivalent exposure to standard contracts and allocate that exposure across the relevant delivery months.

The application remains pending, so the contract cannot begin trading unless the regulator approves it.

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Why the Industry Is Still Opposed

Kalshi did its best to build safeguards against potential objections, but it could not stop opposition from the Commodity Markets Council, whose members include CME, NYMEX, and ICE Futures US, along with trading firms and commercial hedgers.

In a letter sent after Kalshi’s filing, the council warned that oil perpetuals threaten market integrity and urged the CFTC to withhold approval, Bloomberg reported.

It did not name Kalshi, although the filings and dates it cited match WTIPERP. The council’s earlier submission helps explain its concern. A conventional oil future approaches a delivery month, bringing its price closer to the physical market.

A perpetual never reaches that point. Instead, it relies on funding payments to remain aligned with the futures prices it tracks. Kalshi says WTIPERP would still reflect conditions in the physical oil market because its reference price comes from dated futures.

It has also ruled out weekend trading. That choice addresses a concern that recently led CME to shelve its own round-the-clock oil contract.

Kalshi told Bloomberg it had sought feedback from industry groups, but said some had not raised specific objections to its proposed contract.

The council’s new letter looks beyond Kalshi’s design. It also warns that US traders can use VPNs to reach offshore commodity platforms and asks the CFTC to work with foreign regulators to restrict that access.

The council is thus pressing for limits on US-listed oil perpetuals while arguing that traders should not be able to bypass those limits offshore.