IMPACT OF CRUDE OIL PRICE FLUCTUATIONS ON SELECTED SECTORALSTOCK RETURNS IN NIGERIA

Abstract

Crude oil continues to play a defining role in Nigeria’s economic and financial landscape,
influencing investor behaviour, foreign exchange inflows, and government revenue. Yet the
extent to which changes in global oil prices affect different sectors of the Nigerian stock
market remains insufficiently understood. This study investigates how crude oil price
movements shape returns in three key NGX sectoral indices—the Oil and Gas, Banking, and
Consumer Goods indices—and considers whether exchange rate fluctuations alter these
relationships. Using an ex-post facto design, the study draws on data from the CBN
Statistical Bulletin and the Nigerian Exchange Group covering 2009–2024. The analytical
framework includes descriptive statistics, ADF unit root testing, Johansen Cointegration,
VAR modelling, impulse response functions, and Seemingly Unrelated Regression (SUR)
estimation. The results show that oil price changes have a significant impact on the Oil and
Gas and Consumer Goods indices, while the Banking Index shows no meaningful response.
These findings highlight the need for investors, portfolio managers, and policymakers to
closely monitor global oil price patterns alongside exchange rate movements when
evaluating market risks and shaping investment or macroeconomic strategies.