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Study on influencing factors and forecast of global crude oil prices based on the hybrid model

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  • Wang, Donghua
  • Fang, Tianhui

Abstract

As one of the most important strategic resources in the world today, the influencing factors of crude oil have always been the focus of international attention. In this paper, not only the traditional factors were considered, but also the midstream and downstream products of crude oil factor was introduced, referring to the industry's viewpoint, when analyzing the influencing factors of global crude oil prices. Moreover, Least Absolute Shrinkage and Selection Operator (LASSO) model was used to filter and analyze these factors and Least Absolute Shrinkage and Selection Operator-Time Varying Parameter (LASSO-TVP) model was used to forecast global crude oil prices finally. The results showed that global crude oil prices were influenced by different influencing factors, and the same influencing factor had different effects on global crude oil prices in different time periods. Among them, midstream and downstream products of crude oil had a strong influence on global crude oil prices. It was further found that the LASSO-TVP model had the best predictive effect, indicating that the LASSO-TVP model could significantly improve the forecasting effectiveness of LASSO model and TVP model, and accurately forecast global crude oil prices.

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  • Wang, Donghua & Fang, Tianhui, 2025. "Study on influencing factors and forecast of global crude oil prices based on the hybrid model," Energy, Elsevier, vol. 328(C).
    • Handle: RePEc:eee:energy:v:328:y:2025:i:c:s0360544225022467
    DOI: 10.1016/j.energy.2025.136604
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