Preorder of Factors Affecting Oil Prices: Fuzzy PROMETHEE Approach

Oil is a highly demanded worldwide product as oil prices can have a major economic and social impact. There are many factors affecting oil prices, but little is known about which factor mostly influenced oil prices. To understand what caused the fluctuation of oil prices, the investigation leading up to the identification of the factors must be constructed. Thus, this paper attempts to explore the factors that might have contributed to oil prices and analyze them using the fuzzy preference ranking organization method for enrichment evaluation (PROMETHEE) method. In particular, the objective of this study is to rank the influential factors affecting oil prices with the consideration of a few criteria. The fuzzy PROMETHEE model comprises four criteria and five factors as the input information. A group of four experts are invited to provide an evaluation on scales of 1 to 5 of the importance of factors with respect to criteria. In computation, the evaluations are treated as triangular fuzzy numbers in which the uncertainty in data is dealt with amicably. This approach combines the advantages of transformation equation and nonarithmetic mean of the defuzzification method that transforms triangular fuzzy numbers into crisp numbers. The results indicate that “supply and demand†is the most influential factor in determining oil prices. Comparative analysis and future research directions are also discussed at the end of this paper.