Regulatory interventions in the US oil and gas sector: How do the stock markets perceive the CFTC's announcements during the 2008 financial crisis?

- We analyze the impact of the CFTC's regulatory announcements on US oil and gas related stocks.
- We focus on the 2008 financial crisis to see if the interventions can reach the firms in crisis times.
- We show that the announcements significantly affect the stock returns of oil and gas firms.
- The effect is stronger during the period of high-volatility in oil prices.

This paper analyzes the effects of the Commodity Futures Trading Commission's (CFTC) announcements on the stock returns of oil and gas companies around the financial crisis of 2008. Using event study methodology and regression analyses, we examine a set of 122 oil and gas related stocks listed in the New York Stock Exchange (NYSE) for 35 announcements. Our results indicate that CFTC announcements, depending on their content, can affect the stock returns of oil and gas companies. In particular, this is found to hold true during the period of high-volatility in oil prices, i.e., the period following Lehman Brothers failure. During this period, oil and gas related stock returns respond positively to most regulatory announcements, showing that the CFTC's regulatory interventions are perceived positively by the stock market.