At a public hearing in Washington, D.C. on Jan. 14, the Commodity Futures Trading Commission proposed a rule to set speculative position limits for futures and options in energy commodities.

The proposed limits would apply to energy futures and option contracts for Henry Hub natural gas, light sweet West Texas Intermediate or WTI crude, New York Harbor No. 2 heating oil, and New York Harbor gasoline blendstock or RBOB traded on the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE).

The CFTC move is part of a broader effort to ensure that the markets are not cornered by a few big trading houses.

Currently, both NYMEX and ICE have a weak speculative position limits rule.

"CME Group supports equitable application of aggregate position limits across CFTC-regulated designated contract markets and exempt commercial markets, CFTC-recognized foreign boards of trade, and OTC energy market participants," said the Chicago-based exchange, which owns and operates NYMEX, in a release in response to the proposal.

CFTC’s proposal would still allow a few swap dealers to be exempt from position limits, but there would be a uniform process for granting the exemption, said Steve Sherrod, acting CFTC director of market surveillance.

The limits would be imposed across the complex at two levels. The first covers all-months combined, meaning it would apply to aggregated energy positions across physically-delivered and cash-settled contracts and across reporting markets in a referenced energy commodity.

The second level would limit positions for single-month contracts and would also restrict a trader from establishing extraordinarily large positions on opposite sides of the market in physically delivered and cash settled contracts in the same referenced energy commodity.

"We will continue to analyze the new proposal in greater detail and participate in the CFTC's public comment process to ensure that the recommendations do not create unintended consequences that will push market users to unregulated markets beyond the reach of the CFTC," said the CME Group. "We will also continue to work with Members of Congress to enact legislation that will advance these same goals and ensure the proposed rules do not injure liquidity or hedging and trading opportunities for market users."

The CFTC has position limits for agricultural commodity markets.