European Journal of Academic Essays

1-12

Authors: Balogun Oluwafemi Samson, Ogunleye Opeoluwa Mercy

The research result showed there was a general increase in production over time (production was mostly below 60million barrel per month in 2002 while in 2011 no production per month was less than 64 million barrel) showing that trend exists in the data, the simple average method was used to check for seasonality, the minimum value was 93.34 while the maximum was 104.92 none of which was too far from 100% showing there was no seasonal variation. The AIC as well as Mean Square Error (MSE) settled for ARIMA (1,1,1) out of the four initial picks and its was therefore chosen as the best model fit for the data collected for forecasting purposes and for policy formulation. ARIMA (1,1,1) was used to forecast for the year 2011 and its showed that by January the production was 75.02 million barrel and by december production was about 67.25 million barrel, though its a wide difference from the actual value but was still chosen because of its simplicity to use and that its also has the lowest standard error after the forecast. ARIMA (1,1,1) was used to predict for short-term purpose, therefore the year 2012 was predicted and it revealed that the minimum production for 2012 should be around 66.63 million barrel and the maximum production should be around 68.83 million barrel.