As oil remains at higher levels, the correlation of crude oil and equity markets are slowly receding. IN last couple of year, the correlation has moved from negative to positive and now the correlation seems to reducing. Circa 2008, when oil made a high of $ 147 . the corrleation was negative as the highger crude prices were squeezing profit margins of companies and stoking inflation. but in 2009 when world was struggling with recession, oil and equity markets had strong positive correlations as better economic scenario meant more demand for crude.
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