Your required reading from Sehgal and Pandey discusses the complexity of forecas
ID: 386903 • Letter: Y
Question
Your required reading from Sehgal and Pandey discusses the complexity of forecasting oil prices. Perform research in the academic journals in the Saudi Digital Library on the use of forecasting techniques that were discussed in this module, and in the reading. Include time series, trend analysis, and associative forecasting techniques. How are they used? Which would be the best for what industry and why? the article name is Artificial intelligence methods for oil price forecasting: a review and evaluation Neha Sehgal1 · Krishan K. Pandey2 i want complete answer please
Explanation / Answer
Forecasting is done in Oil prices is done for macroeconomic planning, Investment planning and risk management. Oil prices fluctuations have considerable impact on businesses as it is the main source of energy and manufacturers plan their production as per the fluctuations and expected trends in Oil prices. Thus forecasting of Oil prices is done for managing risks to economy. The methods used for forecasting of Oil prices are time series method, structural methods and financial models.
Time series Models - In this method forecasting is done using historical data as there is uncertainity, statistical limitations and noise in forcasting of Oil prices. Time Series model can be further divided into Stochastic models, Regression models and Artificial Intelligence based models. Stochastic models are used on financial information, Regression models use factors independent known variables to forecast Oil prices. Artificial Intelligence methods of forecasting use single models and hybrid models of forecasting and take into consideration wide range of factors.
Fundamentals models of forecasting use economic, political, geographic factors and impact of each of the factor is assessed. There is no single method for effective forecasting of Oil prices as it depends on many factors like supply, demand, inventory, GDP, world events and economy.
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