The usefulness of oil price forecasts—Evidence from survey predictions. (23rd February 2018)

• Record Type: Journal Article
• Authors: Kunze, Frederik; Spiwoks, Markus; Bizer, Kilian; Windels, Torsten
• Is Part Of: Managerial and decision economics. Volume 39:Number 4(2018)
• Page Start: 427
• Page End: 446
• Publication Date: 2018-02-23
• Subjects: Managerial economics -- Periodicals; Decision making -- Periodicals; Management -- Periodicals; 658.15
• DOI: 10.1002/mde.2916
• Languages: English
• ISSNs: 0143-6570

Abstract

Abstract : This paper evaluates survey forecasts for crude oil prices and discusses the implications for decision makers. A novel disaggregated data set incorporating individual forecasts for Brent and Western Texas Intermediate is used. We carry out tests for unbiasedness, sign accuracy, and forecast encompassing, followed by the computation of coefficients for topically oriented trend adjustments and the Theil's U measure. We also control for the forecast horizon finding heterogeneous results. Forecasts are more precise for shorter horizons, but less accurate than the naïve prediction. For longer horizons, topically oriented trend adjustments become more pronounced, but forecasters tend to outperform the naïve predictions.