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Prediction of crude oil prices in COVID-19 outbreak using real data

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  • Öztunç Kaymak, Öznur
  • Kaymak, Yiğit

Abstract

The world has been undergoing a global economic recession for almost two years because of the health crisis stemming from the outbreak and its effects have still continued so far. Especially, COVID-19 reduced consumer spending due to social isolation, lockdown and travel restrictions in 2020. As a result of this, with social and economic life coming to a standstill, oil prices plummeted. With the ongoing uncertainty concerning the COVID-19 pandemic, it has been of great importance for all economic agents to predict crude oil prices. The objective of this paper is to improve a model in order to make more accurate predictions for crude oil price movements. The performance of this model is assessed in terms of some significant criteria comparing our model with its counterparts as well as artificial neural networks (ANNs) and support vector machine (SVM) methods. As for these criteria, root mean square error (RMSE) and mean absolute error (MAE) results show that this model outperforms other models in forecasting crude oil prices. Further, the simulation results for 2021 show that the daily crude oil price forecasts are almost close to the real oil prices.

Suggested Citation

  • Öztunç Kaymak, Öznur & Kaymak, Yiğit, 2022. "Prediction of crude oil prices in COVID-19 outbreak using real data," Chaos, Solitons & Fractals, Elsevier, vol. 158(C).
    • Handle: RePEc:eee:chsofr:v:158:y:2022:i:c:s0960077922002004
    DOI: 10.1016/j.chaos.2022.111990
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