Brent - Bix Price Forecasting Case
In this short video, linked below, Alex reviews working on a couple forecasting models which attempted to forecast the Bunker index price of diesel fuel utilizing Brent oil prices.
The company had a fleet of ships which used a lot of diesel fuel as they worked in the open ocean. Their financial planning & analysis group had two models; however, they weren't finding either particularly useful. By applying some statistics and reviewing their data sets, we were able to massively improve one model while recommending that the other be discarded entirely.
It's important to remember that as markets change, we cannot continue using relatively old data. The old data can bias our model preventing it from describing current market conditions helpfully. If you have any further questions, please feel free to reach out to Alex.