CRUDE OIL TREND

[MAIK + 2]

TIME SERIES ANALYSIS & SEASONALITY

 

 

A process for the definition of  prevailing trends in the time context is the SEASONALITY

METHOD.

According this method  the value of a magnitude lets say the evolution of the  average price of Crude Oil is the product of 3 elements :

 

A. The Long Term Value (L)

 

B. The Seasonality Coefficient (S)

 

C. The Random Coefficient (R)

 

where R =1, on an average basis.

 

 

S is an Index, taking values around to 1.

 

If S<1 then we know that we are in a Month with low seasonality, instead of S>1 where we are in a Month with high seasonality

 

If S=1 then there is no Seasonality, in other words taking the 8.33% (1/12) of an Annual Value (Annual Sales) this will be equal with the sales per month every month...

 

Total view of S indices, is the the  main stream pattern, created from the past, that explains how is expected to be allocated Monthly  an Annual Value....

 

S is also the expected  change of an average value of a variable vs. the average value of the previous month.

 

 

 An example of a  Seasonality Diagram for CRUDE OIL WTI is the following case :