Prediction of Natural Gas Prices in European Gas Hubs Using Artificial Neural Network

Ram, Mansoureh; Taklif, Atefeh; Faridzad, Ali

doi:10.22050/pbr.2019.113878

Document Type : Original Article

Authors

¹ PhD Student in Oil and Gas Economics, Faculty of Economics, Allameh Tabataba`i University, Tehran, Iran

² Assistant Professor, Faculty of Economics, Allameh Tabataba`i University, Tehran, Iran

³ Associate Professor of Energy Economics, Faculty of Economics, Allameh Tabataba`i University, Tehran, Iran

https://doi.org/10.22050/pbr.2019.113878

Abstract

The liberalization of natural gas markets and the emergence of gas hubs in recent decades have shifted the natural gas trade from the regional to the global trade. The growth and maturity of these hubs have weakened the previously established relationship between the natural gas price and the prices of crude oil and petroleum products. Therefore, predicting the price of gas as a strategic commodity has become more important for different countries. Using the neural network method, this paper attempts to develop a model of the monthly prediction of natural gas price. Based on the time series data from 2012 to April 2019 as the input to the neural network, this model predicts the prices in five hubs and natural gas exchange centers in Europe. Based on the R² performance evaluation index of 98% of the neural network model fitted based on the aforementioned data series, the neural network model has acceptable performance in predicting the natural gas price. The results of this study show that using the artificial neural network (ANN) method, the gas prices in the European gas hubs, which are located in European countries, can be predicted with a high degree of accuracy.

Keywords

20.1001.1.26454726.2019.3.2.1.3

Main Subjects

Oil and Gas Economics and Management

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Petroleum Business Review

Prediction of Natural Gas Prices in European Gas Hubs Using Artificial Neural Network

References

References

Volume 3, Issue 2 - Serial Number 7
June 2019
Pages 1-14

Prediction of Natural Gas Prices in European Gas Hubs Using Artificial Neural Network

References

References

Volume 3, Issue 2 - Serial Number 7June 2019Pages 1-14

Volume 3, Issue 2 - Serial Number 7
June 2019
Pages 1-14