ARIMA Modeling of Nigeria Crude Oil Production

Abstract

This study discussed the ARIMA Model for crude oil production in Nigeria from January 2006 to March 2015. The relevance of this study lies in the fact that the quantity of crude oil produced determines the quantity to be either refined and sold or exported as crude which is the main stay of the Nigerian economy. Having a pre knowledge of the quantity of crude oil that may be produced with adequate budgeting can help the country have a viable economy. Multiplicative SARIMA (1,1,1)(0,1,1)₁₂ model was proposed as the best model to be fitted to the crude oil production data. The forecast values from the fitted model agreed with the actual values therefore suggesting that the model could be used for forecasting future quantity of crude oil that may be produced in the country.

Keywords: ARIMA model, Seasonality, Differencing, Crude oil Production.