September 6, 2018

CFTC Staff Issues Report on Impact of U.S. Tight Oil on NYMEX WTI Futures Contract

Washington, DC — The Commodity Futures Trading Commission’s (CFTC) Market Intelligence Branch (MIB) issued a report today that analyzes activity in the NYMEX WTI futures contract.

The report highlights research findings from recent analysis of activity in NYMEX WTI futures contracts as U.S. crude production from tight oil has grown. Staff analyzed futures trading volume and open interest across all listed expirations from January 2003 through March 2018.

Key findings from the research:

• As a whole, volume and open interest in the contract remains robust;
• At a more granular level, open interest in futures contracts for delivery five or more years into the future has declined;
• Based on an examination of data available to the general public, data collected by the CFTC, and conversations with industry participants, the decline in open interest of NYMEX WTI contracts for delivery five or more years in the future has been primarily due to structural changes in physical crude oil caused by the growth of U.S. tight oil production; and
• The overall price level for oil and developments in financial regulation may have had a secondary effect on open interest for NYMEX WTI contracts for delivery five or more years in the future.

This report is part of a series of MIB reports. MIB is a unit of CFTC’s Division of Market Oversight. Part of MIB’s role is to analyze and communicate current and emerging market issues to CFTC leadership and the public and assist the CFTC in making informed policy. MIB staff will publish additional reports on issues of current market interest, such as market liquidity and volatility.