Ever wondered how the rise and fall in crude oil price affects the price of stocks on the Nigerian Stock Exchange? Well this graph may just help explain it
Above is a depiction of the movement in the prices of the top 30 most capitalized stocks in Nigeria (dark) vs the Price of the Bonny Light Crude Oil (light). If you notice, whenever the price of oil rises the rise in the value of stocks also rises and vice versa. However, the NSE 30 index always trails the Bonny Light Price in terms of pace because stock markets take more time to generate demand and when they do take more time to rally. Unlike the price of crude oil which can rise rapidly once there is news that may affect the supply of oil negatively.