Simulation and Prediction of Global Oil Price

This study recognizes and analyzes the basic main factors influencing demand and supply of petroleum; also in addition, with the use of analysis of supply surplus impact on global petroleum market, designs a model for simulation and prediction of oil price. In this model, through the use of modification method of Dynamic Disequilibrium Adjustment Model (DDAM), natural gas price variables, global gross domestic product (GDP),GDP of oil producing countries, production capacity of petroleum, oil supply surplus in market and global oil price, demand and supply of petroleum are being presented. The behaviour of natural gas market are transferred meaningfully to theoil market and cause changes in oil price. In the dynamic simulations of model, the impacts of various shocks on supply and demand of oil prices are investigated and it will be predicted for the years 2008 till 2010. So, the designed model indicates that is has proved to have the ability to analyze political shocks and to predict oil prices and can be used in policy making and oil price prediction too. As a result, the model prediction shows that in the years 2008-2010 the oil price will partly go downward, frontier 100$, however this reduction will not reach to the price fall in the 1990 decade.