An Optimization Approach to Predict Crude Oil Prices

Abstract

The impact of oil price on social, economic, political and many other aspects of human life is quite strong and evident. However, the role playing factors affecting the price are so complex that the price prediction cannot be solely attributed to the simple well known demand-supply relationship. This paper emphasizes on midterm prediction approach rather than short or long term ones, in which a model has been proposed based on a developed algorithm. Prediction of the prices in seasonal or annual basis was performed with highly satisfactory results. Gold and USDX were employed to verify the applicability of the proposed model.